75% of Americans Make Impulse Purchases: Here’s How to Put on the BrakesSubmitted by Retirement Visions, LLC on October 23rd, 2018
Do you tend to spend impulsively during the holiday season? Don’t let impulse purchases drag down a sensible financial plan. Consider these expert tips on being honest—and holding back.
According to CreditCards.com, some 75% of Americans give in to impulsive holiday spending, and interestingly the primary recipients of all that impulse shopping are the buyers themselves.
“Ironically, the most common recipient of an impulse purchase during the gift-giving season is the buyer themselves,” CreditCards.com states in an email to TheStreet. “Exercising at least some discipline, the majority of these spur-of-the-moment buys luckily did not break the bank.”
Younger Americans were most likely to pluck a purchase on the fly, with 83% of millennials (ages 18-35) stating they made an impulse purchase this holiday season.
Also, men were more likely to make an impulse buy for someone else—they were three time more likely to make a purchase for a loved one than women this holiday season.
That’s all fine and well. But what’s up with all this impulse spending in the first place?
“Mainly, we are a society that just likes blowing money,” offers Toby Bloom, an income protection specialist at Integrity Insurance, in Albuquerque. “We have no discipline, so we see something and we must have it. And of all the industrial countries, we save the least.”
Bloom notes that the average U.S. adult savings rate of 4% of annual income is among the worst among the globe’s developed countries.
“Yet we owe a hundred times that on credit cards,” he adds.
The best way to curb impulse spending, experts say, is to be honest with yourself and the primary people in your life.
“That means having open, honest conversations with your family so you are all on the same page,” advises Sacha Millstone, a financial advisor with Raymond James. “Hold everyone accountable by checking in at least once a week.”
Additionally, make sure to keep your long-term financial goals in mind. “Remembering what you’re working towards—retirement, college savings, a wedding—will give you a better perspective and stop you from spending impulsively in the moment, especially during the holidays,” Millstone says.
Dr. Dominique’ N. Reese, money manager and creator of Master My Money University, says Americans make so many impulse purchases, because they’re conditioned to spend, enjoy instant gratification, and lack discipline to set and pursue financial goals.
Her advice? “First, uninstall apps that allow you to shop or make purchases from your phone,” Reese advises. “Then, try spending with cash [budgeted] only for a week, and keep at it on a week to week basis.”
Take some personal financial inventory, too, Reese says. “Conduct a 30- or 60-day look back, to analyze and categorize every purchase that was made to learn where their money was spent and to make changes about how the current and future month’s income is spent,” she suggests. “Then, set some meaningful financial goals with your family and create accountability to achieve those goals.”
Get tough with yourself, too, experts say, and do that by practicing some self-discipline.
“To combat impulsive purchases you need to become a ‘shopping sniper,’” says Andrew Fiebert, co-owner of Listen Money Matters, a personal finance podcast and blog. “Resist every urge you have to impulse buy and ask yourself, ‘Do I really need this right now?’”
Fiebert also advises us to make a shopping list, avoid salespeople, choose the shortest checkout line, and, most importantly, know how retail marketing works.
“If you know the retail marketing secrets, and are able to acknowledge them and move on, you are well on your way to making wiser spending decisions,” he states.
Avoid the big credit card bills and practice some self-discipline and transparency, and count to 100 before making any impulse purchases.
Ideally, the urge to splurge will wane before you get to 75.
Securities offered through Securities Service Network, LLC. Member FINRA/SIPC. Office of supervisory jurisdiction 9729 Cogdill Rd. Suite 301, Knoxville, TN,. 37932 865-777-4677
Fee based services are offered through SSN Advisory, Inc., a registered investment advisor.