Have you ever gone to a grocery store to buy necessities like eggs, soap, or a case of water? Browsing through numerous aisles with intentions of picking up items exclusively written down on your shopping list, only to approach the cashier without any of those things but 5x the items you never intended to purchase? If this scenario evokes a memory, you have most likely been a victim of impulse buying. Our Money Matters, a free financial wellness platform, strives to educate and guide individuals through difficult situations to eliminate financially detrimental habits.
What is Impulse Buying?
Impulse buying simply means: "The buying of goods without planning to do so in advance, as a result of sudden whim or impulse." Although impulsively bought items or goods can be valuable now or in the future, erratic spending can be detrimental to your financial well-being.
So, what are the psychological causes? There are multiple reasons why we indulge in this type of shopping. The good news is once you recognize the underlying issues you can address them. Many cases of impulse buying correlate directly with people who suffer from anxiety or depression. Some behaviors include shopping out of therapeutic tendencies, excitement, or anger. Some individuals even impulse buy out of fear. A study by Slickdeals found that U.S. adults increased their impulse shopping habits by more than 64% in 2022. And the average person spent $314 per month on impulse purchases, up from $276 in 2021 and $183 in 2020. That adds up to almost $4,000 a year.
How Stores and Brands Promote Impulse Buying
Though we are ultimately responsible for our own spending habits, many brands are perpetrating these tendencies by using online behavioral advertising that target a user based on searches and previous purchases. Promotional holidays like Black Friday and Cyber Monday are also prime examples of days in which consumers are encouraged to take advantage of the limited-time offers to buy items they may not need. And don’t forget that special offer at the check-out line with a deal that’s hard to refuse. That’s where FOMA comes into play, or the fear of missing out. According to another study by Soocial, Americans make up to 156 Impulse spending decisions per year.
How To Avoid Unnecessary Spending
· Create a budget and manage your spending habits using Our Money Matters.
· Set up direct deposit into a savings account that you only use for emergencies.
· Put limits on purchasing non-essential items.
· Check the best price before you buy.
· Sign up for a credit card that earns you point or cash back (and pay it off in full monthly).
In summary, impulse buying can lead you down a dark path eventually draining your bank account over time. However, by setting clear goals, spending most of your hard-earned coin on necessities and saving, you can achieve long-term financial health.
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