15 June 2007 3 Comments Print This Post  Email This Post

Many of us would love to save money and not spend it. But why do we consistently buy impulse items over and over again? You tell yourself, “I just gotta have it.” Theres no and, ifs or buts about it if you gotta have it, you gotta have it and you end up buying it. Come on, you know that two or three months later you realize that wasn’t as cool as you had thought and you didn’t have to have it.

Don’t blame yourself though, we’ve all done it and we will continue to do it if we allow ourselves to. You have to go as far as taking away your ability to purchase. Otherwise, Its just human nature at work. Billions of dollars are spent each year researching how to trigger those impulse buying mechanisms in our heads. Thats why we see candy, snacks, magazines and drinks at the checkout aisle in supermarkets. That’s there to trigger the voice that says “I’m so thirsty and tired, waiting here in line” or “I’m bored, lets see who Britney is dating now” and you end up picking up that soda and the magazine. This is done literally everywhere. Amazon.com is genius at this. Every time you visit the site, there are recommended products that they think you’d like, and I have to admit they get pretty close.

How to stop impulse buys

OK enough with the chit chat. What we have to do to really stop impulse buys is to literally take away our ability to purchase the impulse buy item. If you take away a car’s ability to roll (the wheels), it can’t and won’t roll! What I mean by this is to take away the actual means, the money, that you’ll use to make these impulse buy items, which is anything from a $1 snack to a $300 shiny new cell phone. If you take away the ability to spend, you can’t and won’t spend. Here are some tips:

1. Have a “spending” bank account. Only put your monthly target budget in there at the beginning of each month. Get an ATM card for that account.
2. Have your paycheck direct deposited into an online e-savings account or any other high yielding account that is hard to access. What I like about my HSBC e-savings account is that it takes 3-4 days to transfer funds into my “spending” account. So when I get impulsive, I think of all the work I have to do just to move the money over to spend it, and being the lazy person I can sometimes be, that is usually enough to deter that impulse. Put all your extra money in hard access accounts such as your 401k, IRA, mutual fund, etc. If you literally don’t have the money available, it makes it harder for you to spend it.
3. This kind of ties into number 1. Don’t carry your credit cards with you. Just carry you “spending” account’s ATM card. Hide your credit cards! The only reason you should use your credit card is if you get rewards for it and you are diligent enough to pay it off every month.
4. Don’t carry around so much cash. This is the worse. It’s so easy to spend cash when you have it. I’ve always wondered why people cashed their paychecks. Its so easy to spend money that way. Just today I was talking to my girlfriend and we were wondering how we had hundreds of dollars in cash just a few weeks ago and now its gone. I don’t usually carry cash but had it was left over from a previous event. I got lazy to deposit it and now it’s gone.

Once you take away the actual ability and means to buy that impulse item, you buy yourself a lot of time. Impulse buys happen in short periods of time, when before you know it, you spent money. When cash is that much harder to access, you buy yourself the time to think over the purchase, comparison shop, and make an informed decision. There have been so many times where I’ll shop for something and walk around the store for so long that I end up putting down that thing and walking out. By limiting my spend ability, I no longer buy as many toys as I once did, because I literally can’t.