This Festive season avoid Impulsive Buying & Save Money with these tips
October 20203 min read
The Festive season has officially started in India with all the online shopping platforms offering very lucrative deals on various items from Electronics to home decor and clothes to groceries. Add to it the lure of cashback, no-cost EMIs, Instant discounts, and whatnot. Over the next few days, all these discounts and offers can get too good to refuse. But, how should one draw a line and know when to stop spending? Impulsive Buying can get the best of us even before we know it. Today we will share some tips that will help you save money during this festive season.
Impulsive Buying – The Behavioral Flaw
In simple words, Impulsive buying is an unplanned purchase driven by various things. It could be a need to maintain a certain status in a social circle, or obsession over a particular brand and need to own every single merchandise of that brand, or simply the feel-good factor that is associated with buying something expensive. While a lot can be said about what triggers the urge to buy something; we are concerned about its implications on finances.
We are living in uniquely challenging times currently. The Covid-19 crisis has put a lot of limitations on our lifestyle and spending habits. The usual expense on food, clothes, etc is now reduced due to work from home setup. But it has also resulted in an increase in anxiety in a lot of people. And during this time, buying something new and expensive can give the much-needed thrill in life. But it is usually very short-lived.
Impulsive buying impacts an Individual’s finances seriously if not kept in check. The new trend of buying overly expensive items on EMIs has affected an entire generation’s saving ability. Even though there will be short-term gratification as a result of a big purchase, over the long term, it can only turn into regret. Here’s how you can keep control of your expenses and not fall into the trap of discounts and cashback.
Tips to Avoid Impulsive Buying
Let’s look at some tips and strategies you can use whenever you get an urge to make an unnecessary spend.
- Stop Emotional Spending: Do not buy anything when you are stressed or happy or sad or angry. Usually, when a person is overwhelmed with emotions, it is difficult to think rationally. Hence, keep a check on your emotions and avoid spending when feeling overwhelmed.
- Organize your Wardrobe: A lot of times, we have more than enough clothes, accessories, and other necessary items. Reorganizing the wardrobe can help us to realize the sufficiency of existing items. And, you can refrain from buying new items.
- Make a list of items you actually want to buy: It is possible that you actually want to make the most of the festive season discount and buy some essential items. You can make a list of items that you actually want to buy and stick to that list while making the purchase.
- Create your Budget and earmark the amount for shopping: This is especially useful for people who want to buy something at every online sale. If you absolutely cannot help yourself every time there is a sale/discount going on; create a budget and clearly define the amount that you will spend. This will help you to limit your expenses and create a habit of spending lesser money than usual.
- Unsubscribe from all the email alerts of the online shopping platforms: Sometimes when you want to change a behavioral flaw extreme measures are necessary. If you unsubscribe from all the alerts related to discounts and sales, there is a good chance that you will miss out on those and in turn will avoid spending money on unnecessary items.
- Use Debit cards instead of Credit cards: The reason for this is the Debit card is an instant expense and will be limited to the amount you have available. However, when you use a credit card, you can get carried away with the expenses. There is always an option of converting the purchase into EMI when you buy via Credit card. Hence, avoid using a credit card for online shopping to curb your expenses.
Impulsive Buying – A Hurdle in Wealth Creation
Wealth creation is the end goal for every individual who is saving even the smallest possible amount from their income. Impulsive buying can put a major dent in the goal of wealth creation. Because, when you spend a lot on unnecessary items, it also reduces your ability to save money. A lot of millennials spend money on online shopping festivals as it creates an illusion of savings because of the discounts. But in the process, they end up spending more than they should.
Every small amount saved and invested now can contribute to the wealth in the future. As a famous writer, Morgan Housel mentioned in his book, “The Psychology of Money”:
The First idea to save money – simple, but easy to overlook – is that building wealth has little to do with your income or investment returns and lots to do with your savings rate.