Money is such an important factor in daily living, resulting in it being an issue. This is because many people don’t know how to handle money efficiently. The challenge that most people have with money is not always about the amount of income they have; it is how the income is spent. Many people have bad spending habits, which negatively affects their financial life.
Impulsive spending means purchasing something without plans to do so. Whether or not you believe in budgeting, having shopping or grocery lists is something we all do unconsciously. We make unconscious decisions on how we spend money, so in an instance where you make a purchase vastly outside your plans, that is an impulse buy. Impulsive spending can lead to debt and several financial frustrations. Impulsive spending must be curbed or managed, so people have healthier money habits.
There are different reasons why people indulge in impulse spending:
- Emotions: Sometimes, people shop based on their feelings and emotions, even if there were no plans made beforehand. If people feel so happy, they might just want to shop for things they don’t need. This also goes for when people are sad; they may just want to feel better and then go shopping for things they did not plan for and may not necessarily need.
- Love of Shopping: Shopping is an activity that most people commonly enjoy. Some people are shopaholics and enjoy doing it for fun. It might very well be an addiction where people purchase frivolous items just because they have the money. The more they keep shopping just for fun, the more they spend money impulsively on things they don’t need.
- A Good Deal: Most people buy things they don’t plan for because promotions are available on the products. An average Nigerian likes a discount, so many people purchase a product they have not planned for just because it comes at a reduced price. Deals are good, and it helps with saving, though people must have limits. Impulsive spending starts from buying small products attached to deals to eventually buying items with no reasonable promotions and are unnecessary.
There are different ways that impulse spending can be prevented or managed, and here are some tips that can help with that:
- Delay of purchases: This might not be the easiest approach for an impulsive spender because they do not plan or think before making purchases. This has to be a conscious decision made when shopping. If there is something you are not sure about buying, hold off on it. Don’t buy it at that moment, and give it another 24 hours before you decide to purchase the item. If you can’t wait for 24 hours, wait till you are done with all the planned purchases and see if you are still interested in getting the product.
- Budget and Mindful spending: Having a budget seems like the most obvious tip regarding impulsive spending. Still, it helps you prioritise the things you need and on things you like. You can even have a budget for splurging. People often rationalise their impulse purchases as an opportunity to enjoy or reward themselves with something they like. You can budget for essentials, yet include things that you actually like, so you won’t make excuses to make more unplanned purchases. If you can budget and plan mindfully, it helps set a necessary discipline, especially if you are prone to impulse spending.
- Avoid Emotional Purchases: One of the major reasons why people spend impulsively is linked to emotional stress. People may shop when they are happy, but people mostly shop when they are unhappy and want to make themselves feel better. You have to discipline yourself not to buy things based on feelings because that would only bring regret and financial distress in the long run. Find a better way to feel good that won’t affect your income.
- Go with cash only when shopping: Another way to curb impulsive spending is to go to places with just the amount of money budgeted for the things you want to purchase. It is the most disciplined way to prevent impulsive spending because once you only have cash, you absolutely have to stick to plans unless you borrow more money. Using credit cards or atm cards gives you unlimited access to money and allows you to buy as much as you want.
- Find an accountability partner: Impulsive spending is a habit and can sometimes be addictive. As a chronic impulsive spender, budgeting and saving might not be enough. It would be a huge advantage to have someone who keeps you in check and helps you stay accountable when it comes to spending money.
Building good spending habits takes time and practice. You have to understand why you spend impulsively and the best tip that works for you in preventing it. It wouldn’t happen overnight, especially if you are used to spending impulsively. But these tips would help your spending habits and curb or prevent your impulsive spending. Stay consistent and patient with yourself through the process.