One of my biggest budget busters was impulse purchases. I’ve finally gotten to the point where I have a bit of money to spend, and when I saw that I had money in my bank account, why not spend it? It was in my account, therefore it was available.
When I balanced my budget, it was never the big transactions that killed me. No car payments, no student loans. It was the little transactions, a few dollars at a time, that were absolutely killing our budget. Our budget was absolutely destroyed $20 at a time.
In order to take control of our budget and get ahead of our finances (we’re saving for a house), I had to find ways to stop impulse purchases. Here are 5 easy ways to stop impulse purchases.
Only Carry Cash
Most people find that cash is harder to spend than swiping a card. In fact, sources like Forbes have published articles that say that people spend up to 100% more when they use a credit card rather than spending cash (I did not differentiate between a debit card and a credit card for my research, just a note). If you follow Dave Ramsey, you know how he solidly advocates that people have a harder time parting with and spending cash.
On one level, this makes sense: but why does that matter? It’s the same amount of money, after all.
The reality is that when you swipe a card, you don’t feel like you’ve handed over money. The “pain” comes when you log into your bank account later, when you’re reconciling transactions. The delay in pain means that you don’t always recognize that you’re spending the money.
So why does that matter for an impulse purchase? When you have to pull a twenty dollar bill from your pocket, you’re more likely to think twice before you buy.
Transfer “Extra” Money to A Savings Account
When Joe and I get paid, our money goes into our checking accounts. From there, we put money into savings: our car replacement sinking fund, our emergency fund, etc. We pay our bills.
Any “extra” money gets put into a savings account that a debit card can’t touch. We don’t operate on a cash envelope system (I’ll probably write more about that later).
I pay for my harp rental on the first of the month, so I set aside that money from a middle of the month paycheck. Since I transfer the money over in an ACH transaction, I just put it safely in an account where it can’t get touched.
When there’s no money in the bank account, I can’t spend it.
Don’t Save Card Information
Google is so helpful, right? They’re always offering to save my card number for me when I make online purchases.
That’s the easiest way to convince me to make a fast payment decision. The less work that I have to do from making a snap decision all the way to completing the purchase, the more likely I am to spend the money.
Online stores powered by Shopify will save your payment information, and send a text alert to your phone that allows you to enter a code, which will allow you to use your saved payment information. Paypal will ask you to simply enter a password, and you can shop using your Paypal balance, or even use your credit card or debit card.
It’s crazy how simply saving card information helps you make an impulse purchase. The easier, the better.
Wait to Open Purchases
If you do make a purchase, don’t open it immediately. If you think there is a chance you might regret it, keep it in the package for 24 hours! If it turns out that you really don’t need it, you can then return it.
Buyer’s remorse can take time to kick in: you may be excited about having an item, but then reality sets in. You log the purchase in your budget, or you look at the item you bought … and realize that you don’t really need it.
If you wait, you don’t have it already incorporated into your house and your possessions.
Purchase Items In-Store When Possible
Have you ever seen a video ad on Facebook that was AMAZING and you had to have it? Well, that’s marketing and targeting at it’s finest. It WORKS.
Then, when the item finally arrived, you found that it was a cheap piece of junk. Sometimes the simple act of holding an item will help you see that you don’t actually want it or need it.
If you think that you might want something, then research and find out where you can find it in-store.
This will make several things happen: you’ll have to work to find your item. Remember, the easier it is to make a purchase, the more likely you are to make an impulse purchase. Just making yourself “put on pants” and leave the house makes you more likely to abandon the purchase.
Then, you’ll have to actually hold the item, and ask yourself, “is this worth it?”
Every time I hold something, I find myself looking at the quality (especially if it’s an item that is more than $50).
If I don’t feel like it’s worth the amount it costs, I’m more likely to walk away without it.
Do you have trouble with impulse purchases? What do you do to help yourself avoid spending money on impulse purchases?
