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What is 'Impulsive Spending'

Impulsive spending is when you purchase goods and services without planning in advance. When a customer spends and buys at the spur of the moment, it is called Impulsive spending. Are you suffering from this syndrome? If yes, read on…this article will help you overcome it.

Impulsive buying can be triggered by visiting a shop/mall or purchasing online as well. We shall address this in two parts  - Firstly the triggers and secondly the solution to impulsive buying behaviour.

Triggers:
 
1.    Sale : 
Whenever you see “Sale” you tend to do over-purchasing or impulsive purchasing, whether offline or online. At times, you tend to buy / spend on those items which, once you reach home, you feel were not required. I know you are nodding your head. It happens with most people who look for options of Sale. Instead of purchasing for Rs. 5000 (for example), you end up purchasing items worth Rs. 7500 / 10000 

2.     Latest Model /  Fashion : 
At times, we get carried away to buy latest mobile / latest car/ latest dress on the street as status symbol . This leads to impulsive spending. This is a very common trait now a days.

3.    Do you suffer from FOMO ? :
At times, we suffer from FOMO. (Fear of Missing Out)…My friend/ neighbour has this product and I should also get the same . At times trying to buy the same , leads to overspending.


How to Overcome this Impulsive Buying Habit ?

1.Create A Monthly Budget  :

Do you prepare a monthly spending budget ? If your answer is yes and still you overshoot your spendings, you must revisit your spending habits and stick to your budget. If you haven’t prepared a monthly budget till date, take a pledge to make a monthly budget as New Year Resolution and follow it diligently. I know it will be difficult in beginning, still if you are able to keep it on track with 10% deviation in first 2 months, you will be on track from 3rd month.

2.Prioritize your Purchases : 

Prepare a list of purchases you need to do . Differentiate it on essentials and not so essential . Buy only the essentials. Now you will be tempted to purchase the non-essential goods. Give yourself 24 hours. Ask yourself if the item you want to buy is actually something 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 hope shopping apps in our mobiles and credit cards in our pocket, which make shopping extremely easy. Remove shopping Apps from your mobile and don’t carry credit cards, except for one just for emergency, which has the lowest credit available. Keeping a check will help you reduce unnecessary spending.

4.Start a SIP/ Recurring Deposit :
If you are an impulsive spender, the best of all to control is to start SIP / Recurring Deposit in bank on day you receive salary/ business income in your bank account.  The auto-debit facility will not only help you save/ invest funds, but will also help you stop impulsive spending.

5.Accountability  Partner :
You need an accountability partner who can keep a check on your spendings. It could be your spouse or friend or anyone else whom you can trust. Have monthly check - ins of budget where you share your spendings with your partner with honesty.

Hopefully the above methods will help you overcome your overspending habit and will help you save/ invest for your financial goals.