We’ve all made impulse purchases before. Many of us have the guilty pleasure of spending money on products that we don’t necessarily need, but decide in an instant that it is something that we want. While this is certainly nothing to be ashamed of, it can add up fast and really affect your overall financial health. Follow these tips to keep more money in your pockets and stop overspending on impulse buys.
1. Create a Plan For Your Money
When you develop a plan for your money, you’re structuring an organized system for your expenses to ensure saving and spending limits are set and you’re utilizing your paychecks the correct way. This process should be fairly simple, and with the right tools it can be even easier than you originally anticipated. You can use anything from an online budget calculator to a simple spreadsheet to keep track of your bills and determine whether or not you can spend on something that’s not within your budget. For the highest likelihood of success, take income, living expenses, savings and entertainment in consideration.
Starting with income, be sure to include your main source of money for each month, along with any side hustles or additional jobs that you may have. Once you calculate your total income, the next step is to find your total living expenses. Remember to include rent, utilities, car payments and other outstanding debts you carry each month. Next, subtract your total expenses from your total income, and the remaining money should be divided into two. One half of that money should be placed into a savings account for financial emergencies or situations where you need to pay for a hefty expense. The other half should be placed into a separate spending account, that you can use for entertainment purposes. When looking for a service that helps keep your finances organized, it is important to find one that has no overdraft fees to ensure that if you accidentally overspend, you won’t get penalized for it. Looking into the major toll that banking fees can help you utilize services that are helpful and aid to your goal to avoid overspending.
2. Control Retail Therapy
Impulse buys can happen through engaging in retail therapy, which is going shopping when you’re stressed, sad or in an emotional state of mind. Nearly everyone is guilty of this at least once in a while, and a study from Psychology Today shows that making purchases under stress and sadness has the ability to make you feel better, but only temporarily. While your emotions are running you may feel the need to buy items to give you a sense of normalcy and validation, however these purchases tend to be more expensive and are not items you necessarily need. Although it may be challenging, try giving yourself time to think about the purchase instead of swiping your credit card right away. If there is something that you want to buy, but your finances aren’t at a point where you can, write it down or make note of it in your phone so you can reference it later on when you have more cash to spend.
3. Make a Wish List
There will be times when you’ll have the urge to spend, but with the status of your bank account, you may not be able to complete the purchase. One of the best ways to keep yourself from overspending on those impulse buys is by making a wishlist of all the items that you think you want or may need. Try ranking these items by their expense or how badly you need them to stay organized. If it’s a larger purchase, like a television, a piece of furniture, or a new laptop, it may be smart to sleep on it and wake up with a fresh mindset the following day to really determine if it;s something you need in the current moment. Don’t ever feel uncomfortable with the decision to revise your wanted purchases numerous times. It shows that you have complete control over our financial situation! If you find yourself still wanting the products on your wish-list, now you can begin saving for them. Setting money aside each paycheck or month will help you earn your wish-list, this will also give you a sense of accomplishment and feel more gratifying once you actually buy the products.
4. Be Mindful of Your Online Shopping Habits
Online shopping is one of the easiest ways to impulse buy. Since you aren’t physically holding the item or paying with cash, it is super easy to overspend. Seeing so many items online and so quickly can also increase the odds of you overspending. Typically when you’re viewing items and placing them in your cart, it will automatically trigger a pop up for items that you may like or what other people purchased when they purchased the original item in your shopping cart. Seeing this pop up and being able to add items into your cart with just a click of a button makes for a dangerous recipe when you are trying to save money. When you think of a product that you’d really like, instead of immediately going directly to an online shopping site, like Amazon for example, and making a purchase, try giving yourself time to mull it over. Even take the time to go to a physical store to touch the item and really determine if it is something that you’d like to purchase. The inconvenience of driving to a store and taking time out of your day to purchase a product can really help you determine if it is a necessity or just another impulse buy.
Impulse buying affects us all, whether you are constantly in the need for something new, love the atmosphere of being in a store knowing you can look at a variety of items, or using retail therapy to feel better in your favorite shops with no goal in mind. Luckily there are plenty of ways to beat the odds through an organized savings plan, and spending control methods for a better financial future!