Do you remember the movie Confessions of a Shopaholic? At the start of the movie, the main character, Rebecca Bloomwood, is a financial train wreck. She spends with wild and reckless abandon, maxing out 12 credit cards thanks to her uncontrollable urge to splurge.
While you probably (hopefully!) haven’t maxed out 12 credit cards, we’ve all had that moment of temporary insanity where we just had to have something.
You’d be hard pressed to find someone who doesn’t have a living room filled with impulse Kmart purchases, or an entire section of their wardrobe dedicated to unworn impulse buys that are gathering a thick layer of dust. At this point I’m basically just describing myself…
In the movie, Bloomwood’s problem stems from childhood when she believed credit cards were “magic cards”. Oh, if only!
Thankfully, as the movie progresses, she realises how out of control her spending has become and takes steps to rein it in. One of the ways she tries doing this is by chucking her credit card in the freezer which…needless to say, doesn’t work.
So here are 12 ways to rein in your impulsive spending habits that do work.
1. Make. A. Budget.
Most people don’t even realise how much they’re spending… until they check their statement and mistakenly think their bank account details have been compromised, when in actuality, it was YOU who spent all of the money – not a Nigerian scammer.
Creating a budget and knowing what you spend should be your first priority. After all, if you have no idea where all your money is going, how will you know where you need to cut back?
You want to start by making a list of all your monthly expenses: think rent, bills, groceries, and any subscriptions or debt payments you may have. Once you know how much money has to come out of your pay each month (and no, money for wine does not count. Repeat after me: does not count), you can see how much you have left.
You then want to divide the amount you have leftover into two: one portion will go straight into your savings account and the other amount is your spending money – AKA the amount you can impulse shop with guilt-free.
2. Spend with cash
It’s time to get old school, people! When you can actually see the amount of money you’re spending, you’re way less likely to be liberal with your money.
When you mindlessly tap your card, you probably aren’t thinking about the amount you’re spending. You can’t see it, so it doesn’t feel like real money.
3. Implement a wait list for big purchases
If you see something you want to buy, write it down and put it somewhere safely out of sight.
If you’re still thinking about the item 30 days later, go ahead and buy it. Didn’t give it another day’s thought? That’s a sign you didn’t need it in the first place. Decision made.
4. Unsubscribe from emailing lists
Subscribing to a store’s emailing list can be a great way to score discounts and free shipping, so in some ways it can save you money.
But if you’re prone to impulsive shopping, being bombarded with emails announcing “50% OFF EVERYTHING” is like waving lollies in front of a child – hard to resist.
The power of even a 20% off sign is hard to ignore. These signs trigger our inner bargain-hunter and trick us into thinking we need that item. And it’s hard to pass up a bargain!
If we do, we feel like we’re missing out on something really important. It’s that FOMO (fear of missing out) that leads us to justify an impulse purchase based on the 20% or 50% we’ve saved, rather than looking at it for what it is: an unbudgeted-for impulse buy.
Do yourself a solid and unsubscribe from store emailing lists so you won’t be tempted to splurge every time there’s a sale. If you don’t know about the sale, you won’t feel like you’re missing out. Out of sight, out of mind!
5. Don’t drink and shop
You wouldn’t drink and drive (I hope) so you shouldn’t drink and shop either. Anyone who has ever browsed the internet after a few glasses of wine knows that alcohol and online shopping is a dangerous combination.
Some people don’t even remember buying anything until the email confirmation lands in their inbox, or worse, a mysterious package arrives on their doorstep.
There are entire corners of the internet dedicated to people sharing the purchases they’ve made while drunk and regretted later. My personal favourite is the person who bought their pet toad 100 tiny top hats while under the influence.
Your drunk purchases might make for a funny story to tell at parties, but they might also be sending you broke.
6. Calculate how much work it would take to pay for the item
When the impulse to buy something strikes, take a second and ask yourself whether what’s written on the price tag is really worth the cost.
Compare the price with the time it would take for you to earn that money. How many hours of work would you need to put in to pay for that $200 pair of shoes? They’re nice, but are they really worth a full day of work?
If that doesn’t work, consider the cost per wear. If you’re only going to wear those shoes a couple of times, that’s $100 per wear. Still worth it?
7. Avoid credit cards like the plague
Credit cards aren’t inherently bad, but if you’re prone to impulse shopping, credit cards are definitely not your friend. It’s just way too easy to put everything on your card in the midst of a big spending spree and before you know it, you’re up to your eyeballs in debt. Or you’ve maxed out twelve credit cards.
Avoid that by getting rid of the thing that enables you – in this case, the card. Don’t bring it with you when you go shopping – use your debit card or cash for purchases instead.
Read our article on the arguments for and against getting rid of your credit card here.
8. Don’t turn to retail therapy
Buying things when you’re feeling emotional is a bad idea but let’s be honest – we’ve all done it at some point.
Whether it was after a breakup or a bad day at work, we’ve all used shopping as a means of instant gratification. Something to bolster our bruised ego. But after the initial buzz has worn off, you actually feel worse than you did before. That’s because whatever you buy that’s associated with the thing you’re trying to forget actually just serves as a constant reminder of it. So instead of being a consolation prize, it serves as a trigger to make you feel worse.
Retail therapy isn’t just limited to when you’re feeling down either – maybe you’ve been promoted at work and want to treat yo’self. Or maybe you’re bored so you hit up Kmart and look at their homewares just for something to do.
If you’re the kind of person who works through a breakup by buying yourself something special, stop. Not only are you setting yourself up for terrible financial habits, it’s a really unhealthy coping mechanism to get into.
Instead, find something else to make you feel better – like listening to music or going for a walk.
9. Reevaluate what you already own
If you’re an impulsive shopper, you’ve probably already got a lot of stuff. For me, it’s skincare products, homewares and clothes.
Whatever your poison is, take five and think about what you already own before you buy something else you probably don’t need. Do you really need more fake plants?
10. Give yourself a splurge account
If it’s within your budget, put some of your income aside towards a splurge account. By doing that, you can give in to an impulse buy every now and then without feeling guilty or worrying about overspending.
The amount of money you set aside should be determined only after you’ve taken all the essentials like rent, groceries and bills into account.
11. Put away the money you were going to spend
Easier said than done, but before you go and spend money on more things you don’t need, deposit the money you would have spent on that item into your savings account instead.
Not convinced? Go through your bank statements one night and add up all the money you’ve spent on unnecessary impulse buys over the past year. Now look up the cost of flights to Hawaii. I definitely know people who spend more on the former.
And even if you don’t have quite enough left over to fund an overseas trip by saving the money you would have otherwise spent, you probably will have enough for a nice weekend away.
12. Avoid Afterpain
Shop now, enjoy now, pay later. Platforms like Afterpay allow you to enjoy your purchase straight away – all you have to do is make four interest-free payments down the track. Future problem, right?
Afterpay is literally fueling our spending habits by growing both our wardrobes… and our debt. We can conveniently spend money we don’t have on things we don’t need, which sounds a lot like impulse shopping to me.
Platforms like Afterpay are a game changer for impulse shoppers because you can literally take something straight home and it’s yours before you’ve even put a dollar towards it. But will you still be happy paying off that dress in four weeks time when it’s old news at the back of your wardrobe?
Savings.com.au’s two cents
In today’s YOLO culture, frugality isn’t something that’s celebrated – or even taught. While it’s fine to give in and treat yourself every now and then, being aware of your own consumer behaviour is key.
Whether you make impulse purchases because you’re sad or after one too many wines, recognising what triggers your impulse buying and taking steps to address the problem will help you make better financial decisions.