I’ll admit it. I used to be an impulse spender. That was before I had children, ran a business and had a much tighter budget. Still, my impulse spending led to unnecessary credit card debt and an accumulation of stuff I really did not need or use. However, if you asked me how to stop spending so much fifteen years ago, I’m not sure I would’ve know what to do. Now, after working with so many clients, I’ve seen what works.
What is impulse spending?
For those who are impulse buyers, you probably already know what impulse spending is. In case you are not sure, impulse spending is making a purchase without a plan. It’s generally triggered by something emotional. For some people, it’s shoes or handbags. For others, it’s clothes or home decor. Regardless of what you are choosing to purchase, if it’s not planned, it’s impulse spending.
Why is impulse spending a bad thing?
Impulse spending is a bad thing when spending on instant gratification gets in the way of your bigger financial goals. For example, if you have a goal to pay off your debt but impulse spending is actually making you take on more debt, that’s a problem. Even if you have no debt but impulse spending is getting in the way of saving as much as you could, that’s a problem.
10 Ways to Stop Impulse Spending
Below I provide a number of different ways to stop impulse spending. They are in no particular order. The key is really to figure out what works for you. If you do not do a lot of online shopping or you don’t subscribe to promotional emails then those tips are not going to help you. Take a look at your own behavior to figure out what will work best for you.
Get crystal clear on your financial goals.
If you are an overspender, one of the best things that you can do for yourself is get very clear on your “why.” If you aren’t familiar with Simon Sinek‘s talk called “Find Your Why,” I recommend looking it up on YouTube. Sinek may not be talking about impulse spending but the the topic of “finding your why” is really relevant for any goal you are trying to achieve. If you can get clear on your motivation, it can help you stay on track when you are distracted.
I’ll give you an example from my own life. Building a successful business is really important to me. Sometimes that means I need to forego nights out with friends or spend less at Christmas because I want to be able to invest in my business. I have a business plan that I am focused on achieving because ultimately, I want to provide for my children. I have quantified my goals and put specific time frames in place for when I want to reach them. Without having this plan in writing, it would be much harder for me to ignore my impulses.
Write down a financial goal that is important to you and place it in your wallet.
Have you ever heard the weight loss recommendation to put a photo on the fridge of the size you want to be? This is essentially the financial version. If you are saving for your dream family vacation, put a picture of the place in your wallet so you don’t forget your goal when you’re having a weak moment and you see a sale at the mall. It’s a great reminder when you open up your wallet to buy something that you really don’t need.
Don’t save your credit card information on shopping websites.
I’ll be the first to admit that I am guilty of impulse shopping online. The retailers are smart. They study your shopping habits and serve up enticing ads constantly. One step to help deter this behavior is not to have your credit card information saved online. That way, you need to get up and get your wallet to make a purchase. Hopefully, you’ve written your goal down or put an image in your wallet to remind you why you may want to rethink that purchase.
Unsubscribe from promotional emails.
Have you ever opened up your email to see a sale reminder from one of your favorite online retailers? The next thing you know, you are looking at their website and putting items in your cart that you had not even been thinking about buying before getting that email. Here’s a simple solution. Unsubscribe from promotional emails. Believe me, I do not like paying full price for anything either. You can always look up discount codes online when you are making a planned purchase. You do not need constant email temptation if you have a problem with impulse shopping.
Make a list before you go shopping. This includes before you go shopping online.
It’s very common for people to make lists before they go grocery shopping. However, it’s less common when people do other types of shopping. I find this to be especially important when I am shopping for Christmas presents. I always want the presents to seem relatively equal between my three children so if I buy things on impulse, someone always end up short and then I have to run out at the last minute to even things out.
Don’t carry credit cards in your wallet.
If your credit cards are enabling your impulse spending, do not carry them with you on a regular basis. Leave them at home. You can always access them for a planned purchase or in case of an emergency but by keeping them out of your wallet, you won’t rack up credit card debt with things you do not need.
Consider any major purchase for at least 24 hours prior to committing.
Sometimes you just have to make some rules for yourself and stick to them. I always encourage people to consider any major purchase for at least 24 hours prior to committing. This includes things that are within your spending plan. If you are using a large chunk of your savings or are committing to a monthly payment, you want to make sure you have thoroughly considered your purchase. One of the issues that often arises with clients is that they realize six months after purchasing a car that the payment is really more than they can afford. Taking the time to see how the payment will fit into your overall budget is an important step in the car-buying process.
Be mindful about your spending.
One way to be mindful is to write down everything you spend. You can keep a small notebook in your wallet and write it down. For some, the act of keeping track of spending is enough to deter them from making unnecessary purchases.
Make a list of things you can do instead of “retail therapy.”
For some, shopping can be very cathartic. For those, who have not budgeted for it, it can be a recipe for disaster. If you are an emotional shopper, take time to make a list of things that you can do instead of shopping when you feel emotional. For example, you could call a friend, journal or go for a walk. Those are three things that work for me that don’t cost any money. Make a list of low or no-cost things that work for you and the next time you’re feeling emotional, consider an alternative to retail therapy.
Have a financial accountability partner.
Money is still a taboo topic in many social circles. However, if you can find a friend or spouse to remind you of your goals when you are spending outside your plan, it can be extremely helpful. Of course, a professional can help with this as well. I enjoy serving as an accountability partner for many of my clients. I love helping people reach their goals.
If you need help staying on track to reach your financial goals, we are here to support you. We offer no judgment but will provide the occasional tough love when necessary. While we are based in Ohio, we maintain an active online presence and meet with clients virtually throughout the country. Schedule your free consultation today and learn how we can help you achieve your goals.