Does impulse spending regularly get the better of you and your budget? While it’s perfectly acceptable to treat yourself from time to time, unnecessary or ill-thought-out purchases can delay savings goals and leave you short on funds for essentials.
The good news is that there are lots of simple ways to reign in your impulses and make smarter decisions with your money. Below we explore what impulse spending is and the negative effects it can have, before sharing six practical strategies for controlling it.
What Does Impulse Spending Mean?
Simply put, you can think of an impulse purchase as any purchase that isn’t pre-planned.
People tend to spend impulsively when they’re exposed to certain triggers when shopping in a store or online, such as conveniently placed displays or discount promotions. You are also more likely to make impulse purchases when experiencing certain emotions, such as happiness or stress. Retailers are also aware of this – they know all about the phrase ‘retail therapy’!
Be it a snack, t-shirt or even a car, it’s common to feel excited when buying something new. This feeling doesn’t always last long, however – and too much impulse spending could do serious damage to your personal finances.
Why Is Impulse Buying Bad?
Not every purchase needs to be planned out months in advance and it’s okay to indulge occasionally if you can afford to. But making regular impulse buys could quickly blow your monthly budget, destroy your savings goals and eventually lead to debt.
Spending beyond your means makes it harder to keep up with the essentials such as rent, utility bills and food. At best, you might have to cut out other expenses like social activities. At worst, you could miss bill payments and damage your credit score, limiting your credit opportunities in the future.
Impulse purchases such as extra clothes can also be wasteful if they’re not truly needed. Or if you’ve spontaneously bought an item that would usually need extra research, such as a new kitchen appliance, you could be left with a poor-quality item that doesn’t meet your needs.
How to Control Impulse Spending
Here are six simple tips for controlling your impulses whenever you feel that overwhelming urge to spend!
Know Your Spending Triggers
Avoiding the activities or situations that make you tempted to spend will limit how much you have to fight the impulse in the first place. This could mean not walking past certain shops on your way to work or staying away from certain websites when feeling bored at home.
Recognising that your spending is becoming a problem is an important step in itself. With greater awareness of the environmental or emotional triggers that drive it, you’ll be better prepared to nip the impulse in the bud before it gets too strong.
Ask Important Questions Before Buying
It can be helpful to dig deep and ask a series of important questions before making certain purchases. These might include:
- Do you really need this item?
- Will you get value out of this item for a long time?
- Can it wait until a later date?
- Are there any other options?
Answering these questions honestly before buying something will help rationalise your spending while also allowing time for your initial urge to ease. If you’re shopping with a friend or partner, you could encourage them to help by reminding you of these questions.
Make Shopping Lists
Many shop layouts are intentionally designed to catch your eye and get you to buy things, regardless of (or additional to) what you went in for. From food to birthday gifts, going in with a clear plan of what you need will reduce the chance of you casually browsing and impulsively spending.
Next time you need to head to the shops, go armed with a list on paper or saved on your smartphone. Include estimates of how much you plan to spend to help you stick to a budget and mentally plan your route to avoid areas that you’re likely to be tempted by.
Use a Prepaid Card
Prepaid cards are ideal for avoiding overspending because you can’t spend any more money than you add.
This is different to credit cards, which involve borrowing money for purchases to pay back at the end of the month. This disconnect can delay the feeling of actually spending money and could even make you forget that you need to pay it back.
Prepaid cards don’t come with an overdraft either, so there’s no chance of impulsively overspending and getting into debt this way.
Set up Automatic Payments
Setting up direct debit payments for essential bills like rent or energy will reduce your temptation to spend money that you’ll need later in the month. They take just minutes to set up and save you having to repeatedly transfer money on set dates.
Track Your Spending
Knowing exactly how much you’re spending and where can help spot the areas in which you need to reign in your impulsive behaviours. Using a mobile banking app is a great way to do this as you’ll see real-time spending notifications all in one place just by checking your phone.
Maybe your lunchtime treats are adding up or weekend splurges are catching up with you. Whatever your spending habits, seeing how much they’re costing over time might be enough to make you think harder about your next purchase.
Knowing how to control impulse spending is only half the battle. But by actively following these tips and taking advantage of our prepaid card and account, you could soon develop healthy financial habits for a better future.