Are you a big impulse buyer? I can be–those things that they put close to the counters at stores–particularly the Container Store, lately, I have found–often look more enticing to me than the items I go into the store to buy. I have tried to bring lists with me that document all of the items I’m supposed to buy at a given store, and as much as I try to stick to the list, it never really works. There are certain stores that I just end up coming out of with several extra bags of stuff I never knew I needed to buy!
Sometimes these add-ons are legitimate: I forgot that we were out of granola bars. Or breakfast shakes. Or diapers. None of those are on the list, but they’re still OK. Or, there’s a huge deal on body wash, and even if I’m not out of it yet, I might be in a few weeks–so why not buy the two-pack? I’ve found that at Costco this phenomenon is particularly difficult to deal with: I hate going there, and want to maximize my purchases so I can avoid coming back any time soon. And, legitimately, there are some things that should be bought at Costco.
But that two-pack of StriVectin cream–a product that I’ve never even tried before–is it really cheaper to buy two? No. Or so I told myself as I was talking myself down from purchasing it last week. Getting people to buy things on impulse is part of Costco’s business model: that’s why they always have so many things clogging up the entrance of the store, including big ticket electronic items. Since you never know what Costco is going to have, you sometimes feel like you should buy the product while you’re there–it might not be available next time.
So, let’s discuss some ideas for avoiding the impulse items that can singlehandedly undermine the rest of your budgeting efforts. The following are rules that can be helpful in keeping yourself from buying extra stuff that you don’t need in a moment of weakness.
- The source of your spending money is irrelevant. It’s important to look at all money as being equal if you want to have financial health. It doesn’t matter if you’re spending “found money,” a gift card from a friend, or the spare change you found in the couch. It’s all money, and it’s all accepted everywhere. I read somewhere, years ago–and I cannot remember where, but regardless it’s relevant–that one of the key indicators of financial health was what an individual chose to do with “found” money or “windfall” money–do they save it? Do they save part and spend part? Or do they blow it all right away? These windfalls are often the difference between living paycheck to paycheck and having a healthy emergency fund. The best way to make sure that you spend (or save) wisely is to remember that all money has the same value. It’s still a waste, even if you won the money on a Superbowl bet.
- Be especially careful with big purchases. When buying big-ticket items like plasma TVs and appliances for the home, cars, et cetera, people are much more likely to spend more than they need to (or can afford). This is especially true for vacations, where people tend to throw out their better sense and figure that it’s OK because they’re on vacation. Big ticket items should be priced out just like everything else in your budget.
- Be aware of marketing techniques. Items are often arranged so that you will be encouraged to buy a certain product. An example that is often cited is the average buyer’s natural “extremeness aversion” in the marketplace–meaning that the average consumer is likely to be wary of the cheapest and the most expensive items in a range. Most people will not buy the cheapest item, but they also won’t buy the most expensive item available–and marketers know this. By limiting the number of cheaper alternatives of an item (such as a computer), marketers know that most people will choose a mid range product or higher, and these purchases can be controlled simply by placing items next to each other on a shelf, or stocking other items separately.
- Beware of Add-Ons to Large Purchases. I’ve said it before and I’ll say it again: YOU DO NOT NEED THE EXTENDED WARRANTY. It’s still money, even if it’s being added on to an already huge purchase. It’s still money if it’s being added on to a financing purchase–while I don’t condone financing consumer purchases, if you do choose to finance, remember that it’s all money coming out of your pocket–so do you really need that LOJACK system? Or the special weather coating?
- Don’t use credit. All of these things are easier to avoid if you don’t use credit card. You are much more likely to spend if you have a credit card, even if you pay your bill in full every month. So don’t do it. Always bring cash–it hurts more!
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{ 2 comments… read them below or add one }
Some obvious solutions are going in with a list, etc., but one great tactic for me is taking my husband. He wants to get out of the store as fast as possible, which leaves minimal time for impulse shopping. This is so effective!! Obviously, this doesn’t happen all the time, but especially for places we don’t go that often, like Target, it’s great.
I also find that sometimes I put an impulse buy in my cart, walk around the store doing my other shopping, and after 10 minutes of doing other shopping, I decide that I don’t really want that impulse buy after all.
Impulse buying at Costco is especially dangerous, since they don’t really sell anything that is less than $10. We have gone to the checkout wondering how we are spending $200 on a pretty empty cart, but it’s because that 2-pack of contact solution is $15, and everything in the cart is like that.
I’m always tempted by the “buying in bulk saves money!” idea, but a friend put it in perspective by calling it “excess inventory” and that there is a cost associated (storage, and you no longer have that money to buy something else now that you “invested” $20 in toilet paper futures). You have to be realistic about savings and convenience vs. “stockpiling” based on some other emotional need leaking out, triggered by the Target logo .
But you are right, one of the best tricks of the trade is to limit access to temptation. Planning shopping trips takes time, but it also saves time and money (driving around, gas, parking costs possibly).
I agree with QB, to hanging out with the impulse buy for a while and reassessing before hitting the checkout line.
And lastly: returns! Save your receipt, note the return deadline so you can get a cash refund and not “store credit” that traps your money out of your reach. I just lost $20+ to a store that went under. Stupid store credit…. Other bad thing about store credit is it’s easy to see it as “free money” (see item 1).