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By Alliant Credit Union
It's estimated that the average person sees or hears between 6,000 to 10,000 ads daily. With increasingly sophisticated marketing technology, consumers are being targeted more closely for purchases they'd actually consider making.
Social media heavily contributes to these eerily accurate ads. Your profiles make it even easier for marketers to assess algorithms for what you care about to ensure you see ads relevant to your lifestyle. All these factors combined make it harder to steer clear of impulse buys. Here are some tips and tricks that will help you make thoughtful purchases without the fear of missing out on the next great thing.
One of the easiest ways to stop impulse buying is to make it more difficult to physically make the purchase. If you're one of those people who have their debit or credit card numbers memorized, commit to forgetting it. Another idea would be to open a cashback credit card with a whole new number—uncommitted to memory—so that you can get rewarded for your purchases.
Think twice before you create an account and store your debit or credit card information at your favorite online retailers. Creating an account increases the risk of fraud if the retailer suffers a security breach and cuts down on the time for you to stop and mentally process the purchase before hitting "checkout."
Always have a plan, no matter what you're shopping for. Did you know grocery stores are designed to make you spend more money? Staple items like produce and dairy are located around the store's perimeter, so you have to walk by endless aisles and endcaps designed to draw your eye in before getting to the products you came for. Once you venture into the aisles, you can often find the more affordable, store-brand items on the lower shelves, with the higher-priced, brand-named items at eye level.
Here's a trick to keep yourself accountable: Keep a running list of things you need to purchase at the grocery store throughout the week. Then, before heading out, organize the list in order of how you walk through the store (for example, produce items, dry goods, household necessities, dairy products). This way, you can avoid impulse spending by not allowing yourself to walk through the other aisles where you may pick up things you don't actually need.
Speaking of carts, try shopping with a smaller cart or basket next time you go to the store. A recent consumer report found that shoppers spent 40% more when using a larger cart over a smaller one—and not always on things they had planned to buy.
So many factors contribute to impulse purchasing, such as your mood, hunger and who you shop with, that can impact your spending habits.
One of the most helpful things you can do is examine your spending habits and adjust accordingly. For example, if you know you're a sucker for clicking on social media ads late at night, especially for clothing, save the link and ask yourself in the morning if you still want it. Giving yourself a set waiting period means you've had time to assess the purchase's pros and cons. It also provides time to find a better deal on the item you're looking at and maybe even a coupon code!
Every great budget should cover three categories: Money you save, spend and give. Having a clear idea of how much "fun money" you can spend monthly will make financial goals like building an emergency fund and long-term goals like saving for a house achievable.
Start by picking out a budget you can stick to. The zero-balance budget is a method of managing money where every single penny of your paycheck is accounted for. This budget easily incorporates a set amount of discretionary spending every month. Another budget that may work well is the 50/30/20 budget, where "fun spending" makes up 30% of your after-tax income.
Building discretionary spending into your budget will allow you to feel like you can still have fun and afford the things that make life enjoyable while you continue working toward your savings goals.
Every purchase comes at a price. Real labor and hard work results in each paycheck you earn. Have you ever considered how many hours of work it takes to pay for one impulse purchase? For example, a designer pair of yoga pants usually costs about $100. If you make $25 an hour, you are spending half a day's salary on that one pair of pants. This tradeoff could be reasonable to you, but if it seems steep, try finding a more affordable knock-off of the pants so you can feel better about the purchase!
Thinking about each item in terms of time spent working can allow your brain space to decide if the item is worth it and applies a tangible value to an intangible payment method like a debit or credit card.
Looking for more budgeting tips? Check out these other blog posts:
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