Money Management
November 11, 2024
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You've heard the story before. There are countless personal finance bloggers, financial planners, and gurus that preach on and on about the benefits of saving money — from the early days of your childhood to the latter days of your retirement, this gospel will remain.
But it's always easier said than done, especially when you have money burning a hole in your pocket. It's so easy to give in to that tempting new pair of shoes or take a little trip to the movies without considering whether you can afford it.
The act of purchasing something suddenly is what psychologists and finance experts alike term as impulsive buying. In other terms, the person did not intend to buy that product; they opted to buy on the spur of the moment.
Instead of logic and forethought, impulse purchases are driven by emotions and impulses. The person's spontaneous choice to purchase anything results from seeing the item suddenly.
Impulse buying could also result from being exposed to a highly effective commercial message.
Impulse purchases can be made on various items - chocolates, a pair of sneakers, a jacket, an artwork, even an automobile may be purchased on the spur of the moment.
Occasionally, the behavior results in regret and other issues such as guilt, condemnation from friends and family, or financial troubles.
Retailers and advertisers profit on impulse buyers or impulse shoppers, who have a strong need for instant gratification.
Impulsive purchases account for a significant share of bubble gum, mints, candies, and chocolate sales. Chocolate, candy bars, and other such items are considered impulse products.
In supermarkets, for instance, such items are conspicuously displayed near the checkout lanes. Shoppers notice them and execute spur-of-the-moment purchasing purchases.
We all like to feel good, and going shopping and fantasizing about acquiring the items we see may be a great deal of fun. Once we begin to feel pleasure as a response to our sense of fictional ownership, individuals are far more inclined to order or buy those things to maintain pleasure.
Another impulse purchase motivator is the link between a buyer and an item. This is associated with the basis of vicarious ownership. When we become emotionally attached to an object, our minds begin to operate as if we don’t own it, making it more difficult to resist purchasing it.
These tricks can give you absolute freedom from impulse purchasing.
Planning your spending and sticking to that plan is a great way to prevent unnecessary expenditure. If you know you're going to the supermarket, it's easy to make a list before you leave the house, so you don't end up buying things you don't need.
When you know your limit, it makes it easier to stick to your budget. For example, if you know you can only spend Ksh5,000 on clothes this month, it's easier to say no to that Ksh8,000 leather jacket.
Before shopping, create a list of must-haves and nice to have. The must-haves are the things that you need at that moment, like milk or soap, but the nice to have are the things that you're not willing to live without, but that isn't necessary at the time.
If you can create a list of must-haves before you shop, you won't be tempted by the "nice to have." If you see something that fits into the "nice to have" category, you can either add it to your wish list for later or buy it if you have the money.
It's true: when you're struggling with comparisons, the internet will not help you. Address the root of the issue if you realize you have problems being satisfied when you keep scrolling everyone's pages. We are not proposing you abandon the internet for good, but try uninstalling apps like Instagram and Facebook all week (or maybe more) and then see what happens.
These days, social media is a giant billboard. And we're not just talking about the beauty and fashion ads that come up when you scroll through Instagram. Like billboards in the physical world, social media makes it easy to be enticed by impulse buys. \
You are bombarded by ads begging you to spend your money everywhere you turn. However, if you don't have the app, you will not see all businesses offering flashy discounts and product developments to spend your money.
Food can be a big impulse buy. We all know what happens: A person goes to the grocery store, and the first thing they see is 50% off donuts. Then, on their way home from work, they stop at the petrol station and grab some fast food on the way.
Sitting in traffic, or waiting at a doctor's office, or whatever – there are plenty of opportunities to indulge in a food purchase that adds up over time.
We're much more likely to buy things we don't need when we're hungry. Avoid grocery shopping when you are hungry.
Researchers at Ohio State University found that TV shopping hosts and their programs have and will continue to affect the shopping habits of the average consumer.
They say that the more people watch these hosts, the more likely they will develop a pseudo-personal relationship with them. In turn, this increases the likelihood of buyers making purchases on impulse.
When your emotions control your spending habits, you'll want to make it a point to be mindful. It's worth mentioning again- do not let your emotions dictate what you buy.
Perhaps you're feeling great and making an impulse purchase, or maybe you're feeling down and thinking that the item will make you feel better.
Have you ever gone shopping when you were in a terrible mood? You know, when your emotions are riding a roller coaster?
It happens quickly, but there's always another way. Whether you're celebrating or trying to cheer yourself up, don't buy anything when your emotions are high unless it was explicitly budgeted for.
When you're shopping, get a sense of how much money you want to spend and only take that amount of cash with you. Keep your debit card at home, or don't bring it at all, so you can't use it.
If you have a shopping plan and no extra money, you can't buy on impulse. That's how money discipline works.
When you're shopping less often, it can curb impulse buying. When you have to wait a week or two in between each shopping trip, you're less likely to buy things on a whim.
Whether it's clothes, food, or even household items, waiting longer between shopping trips can help curb impulse buying.
It's easier than you may think to avoid impulse spending with cash. All you need is some physical money in your wallet. Studies show that when adults use money, they spend less than when they use plastic (cards).
One thing you can do to curb impulse buying is to employ the 30-day wait rule.
Instead of buying something right away, give yourself a month to think about it before deciding. You can use that month to see if you really need it.
Impulse buying is no longer an issue when you stop comparing your life to others.
When you compare yourself to others, you'll always find something missing. However, the game changes when you focus on contentment and satisfaction.
Tread lightly and avoid thinking about what someone else has and instead focus on the things you're grateful for in your own life. If you can learn to be happy with what you have, you'll realize that you have a lot to be thankful for.
If you're not managing your money well, chances are you could be making impulse decisions about your finances.
And one wrong decision can lead to another, and another, until you find yourself in a hole that becomes hard to dig out of.
If you're serious about getting the most out of your financial situation in 2024, it's time to take control of your spending habits once and for all.
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