W
hat is Impulsive Spending?
Impulsive spending is when you purchase goods and services without planning in advance- The purchase at the spur of the moment is called Impulsive spending. Are you suffering from this syndrome? This syndrome is also called “Compulsive Buying Behaviour”, “Shopping Addiction”, “Pathological Buying” and “Buying Disorder”. It’s actually a mental health condition characterized by the persistent, excessive, impulsive and uncontrollable purchase. So you can see most causes for it are psychological. The experts say that people who feel emotionally lonely and are depressed, they indulge in impulsive spending to relieve the stress and feel better.
Impulsive buying can be triggered by visiting a Shop or Mall and there can be a strong urge for On-line purchase as well.
There are steps that can be taken to overcome this habit. However, let’s first know the triggers that drive this behaviour.
Triggers
1. Sale
Whenever you see “Sale” you tend to overdo purchasing which is actually impulsive purchasing and it can be offline or online. Most of the times you tend to buy those items which you do not require – You realize it the moment you reach home. Also you end up spending more during sale against the permitted budget. For example, if you budget of Rs.5000/-, you end up purchasing items worth between Rs.7500 to Rs.10000.
2. Latest Trends
At times, we get carried away to buy latest mobile, latest car or a dress as a status symbol or to appear trendy. This leads to impulsive spending. This is one of the increasing patterns that we can see now a days.
3. Suffering from FOMO
At times, we suffer from FOMO- Fear of Missing Out. You feel that your friend and neighbour has it and you should also possess the same. It’s a definitive cause of impulsive overspending. “Do not save what is left after spending but spend what is left after saving.”
H
ow to Overcome This Impulsive Buying Habit?
1. Create A Monthly Budget
Prepare a monthly spending budget and keep a check on it when you spend. Be aware of the feelings of impulsive spending whenever they arise and discard them. Repetition of it such behaviour will make this as a part of your habit. There may not be full compliance initially, but once you work on it, the over spending habit will fade away. You can make a resolution of it and announce it to your close ones. It may be a New Year resolution.
Impulsive buying is a loss to individuality
2. Prioritize Your Purchases
Prepare a list of purchases you need to do. Differentiate between essential and not so essential purchases. First buy only the essentials. However you will be tempted to purchase the non-essential goods. Give yourself break. Ask yourself if the item you want to buy is actually you need. Move away from the counter or website or Mobile App and wait for next 24 hours. If you still want it after 24 hours, then you’ve also had time to see how it would fit in your budget. This will help you control your impulsive spending.
3. Make Shopping Difficult for Yourself
We all have shopping apps in our mobiles and credit cards in our pocket, which makes shopping extremely easy. Remove shopping Apps from your mobile and don’t carry credit cards, except one, which has the lowest credit available, that too for the emergency. By reducing your spending options, you will be able to avoid unnecessary spending.
4. Start a SIP or Recurring Deposit
If you are an impulsive spender, one of the best options to control is to start SIP or Recurring Deposit in bank on the day you receive salary or business income in your bank account. The auto-debit facility will not only help you save or invest funds, but will also help you stop impulsive spending.
5. Accountability Partner
You need an accountability partner who can keep check on your spending. It could be your spouse or friend or someone whom you can trust. Have monthly check on the budget and share your spends with your partner with honesty.
The above methods are time tested. If you work on them with sincerity and honesty, you will be able to overcome the habit of impulse spending. Which will not only free you from guilt, but will also strengthen your financial position for future.
