Impulse spending or splurging happens more than you think that can negatively impact your finances for priority spending such as retirement savings or building an emergency fund.
A new study conducted by Slick deals/One Poll Survey of more than 2,000 American online shoppers indicated people spend an average of $276 on monthly impulse purchases with most customers happy when buying. The definition of impulse buying is the buying of goods without planning to do so in advance, as a result of a sudden impulse or whim according to Oxford Languages.
The same study also indicated that the average American spends approximately $3,312 annually and makes 12 impulse purchases a month with virtually no planning of doing so. Impulse spending can have negative effects on your finances but there are certain times that call for a splurge like stocking up on groceries if they have a sale or special promotion.
You can also spontaneously treat yourself to a trip to the movies or get yourself some new clothes as long as it isn’t breaking your budget or costing too much. Some splurging here and it isn’t too bad, but it can become a problem if done frequently that can impact your finances or put you in debt.
Impulsive buying can also impact your financial situation and your ability to cover other expenses such as retirement savings, medical care, utility bills, and housing funds. One indication that splurging has become a problem is the emotional attachment formed to “retail therapy” of feeling the thrill of a new purchase being more important than what you’re buying.
There are a couple of methods that will help you prevent/curb impulse spending or splurging that will help maintain your finances through managing spending. The first place to start when considering impulse spending is establishing and committing to a budget that works best for your financial goals.
You can start with a simple 50/20/30 budget that dedicates50% to expenses based on needs, 20% for savings, and 30% for everything else. This will help limit your impulse purchases and ensure security for spending on priorities such as paying bills on time, retirement funding, or building an emergency fund.
Another good rule of thumb for determining whether you’re making an impulse buy is following the 24-hour rule. If you find something you want that might be considered a splurge, take 24 hours to consider whether you really want to make the purchase. This will ensure your decision whether you spend or not while giving you time to consider your financial priorities over an impulse buy.
This might sound a little old school but making a shopping list can help you keep your priorities straight when shopping, so you don’t stray into buying impulse purchases. Another option is making a shopping list so you can pre-order or shop online for store pick-up to avoid any additional temptation while saving time on your next shopping trip.
You can also save money on your next trip to the store by looking over their weekly promotions or sales that are available on most grocer’s websites or you can search all the stores in your area for something specific on the Flipp app or website. Flipp is a great savings tool to find what you need for the best price with the option to search for a specific product or brand that will generate results of the best deals in stores near you. Flipp is also a great tool to find alternatives to expensive products that might be on sale by a different brand for a limited time at a certain store compared to your local go-to grocery store.