by Michelle Jones
When I'm asked about saving money during the holidays, one of my favorite tips to share is to avoid last minute shopping and impulse buying. This is a budget buster we need to avoid ALL throughout the year.
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Most of us have done it. The thought process may go something like this... "Oh look, this is just what I needed!" Or, "What a great sale!!" Then we may even dig the hole deeper with "I know it's not on my list, I probably should wait... but it's here now, I'm here now... maybe it's just meant to be." That last one being my all-time favorite.
People Have Many Ways of Justifying Impulse Purchases
"I've earned it, I need it, I deserve it, he/she would love this gift - though I know it exceeds my budget," or even worse, "I just want it and I want it now - I don't even care what it costs." Hopefully THAT doesn't happen too often, and if it does, one might need to seek counseling.
It's not just gifts, clothing and household items that we may buy on impulse. Anything that can be purchased with money can be bought on impulse. Even big ticket items, like cars and houses.
My husband and I are currently in the process of looking for a new family van (our aging Ford now has over 160,000 miles and is definitely seeking retirement from our busy family life). But unlike the average car buyer, we've been car shopping for over a year!
Every time another salesperson throws the pitch, "What would it take to get you into this van today?", I give them the same bold response. "A miracle. Because it's NOT going to happen." They never seem to believe me, but that's okay. It is their job to make the sale; whether the buyer can really afford it or not.
Not only are we taking our time to find the right vehicle for our family and for our budget, but there is no way we'll ever be pressured into a quick "impulse buy" again.
Been there. Done that.
During the early years of our marriage we were simply too (soft, kind, polite, NAIVE, etc.) to say "NO" and just walk away.
EVERY Purchase We Make Can Affect our Finances
For better or worse.
Learning to manage our finances better and live more frugally can be a lifelong journey, but it doesn't take long to learn that impulse purchases can turn into disasters.
The problem is, many of us may do well when it comes to the bigger purchases like buying a new car or a new home, but what about those smaller everyday purchases, like a few extra sodas or magazines at the grocery store each week?
It may not seem like much, but an extra soda and magazine (or whatever you pick up that you could have done without), can cost you an extra $10-$50 a week. If you're spending an extra $10 a week, that's $520 per year, and 10 years of that regular impulse buying will cost you $5,200.00. Dropping more like $50 a week? That's $2,500 per year and over a period of 10 years... $25,000.00.
25 THOUSAND DOLLARS!
If this is an area where you or someone in your family have a problem, what can you do?
Here's a few ideas to help keep those impulse buys under control:
1. Always keep an ongoing list of things you need to buy on your next trip to any store. Review the list before you leave, and remember to take it with you!
2. Make as few trips to the store as possible each month, and avoid the malls entirely.
3. Give yourself a time limit for how quick to get in and out of the store, along with a personal challenge to not buy anything that's not on your list.
4. Apply my "48-hour Waiting Rule" for all impulse purchases; if 48 hours after LEAVING the store, you decide you...
STILL need it.
STILL want it.
CAN'T find is somewhere else for a better price.
CAN afford it.
And, CAN'T use a similar item at home, or borrow one.
THEN, go ahead and make the purchase.
5. Know what your budget is for miscellaneous items each month. To help keep track of your impulse purchases...
Keep a list of anything extra you purchase throughout the month on a small sheet of paper tucked away in your wallet, or a small notepad in your purse.
Keep track of your receipts in an envelope at home so you'll know how much you're spending as you go through the month. When you've spent your budgeted amount for the month - no more impulse (miscellaneous) purchases.
6. AND, if you've successfully passed by that gorgeous new outfit (or that shiny new car that costs almost as much as a house), and you do not even need to apply the 48-Waiting Rule, that is fantastic! Now you can REWARD yourself for choosing a Better Life, with a luxurious (and FREE) bubble bath tonight. You've earned it!
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Copyright © 2004 by Michelle Jones. All rights reserved.