Apr 23

Impulse Buying Behavior – An insightful look

Speaking of impulse buying, here are some interesting observations that I feel we all should keep in mind to avoid the temptation of impulse buying. I am sure a lot of stores might not like my thoughts as impulse buying by consumers  is a several trillion dollar market. Yes, you heard it right: trillions!

Whenever I found myself involved in impulse buying behavior, here is what I felt or found:

  • When I had the item purchased, I mostly found out that it wasn’t the best deal. Either the product was priced higher or there were similar, but better valued products that I could have purchased.
  • It caused me to pay another visit to the store to return the stuff at times.
  • I have had instances where I had sold my impulse purchase without even using it. Whenever that happened, it gave me a regretful feeling as I sold the item, usually at half price or for free to another friend.
  • Some food items that I bought impulsively, I never used. I then had to throw it as the item were dated.
  • Last but not the least, I carried the guilt of wasting money and would end up watching my spending even on my true wants and needs. Yeah, it sounds stupid or crazy but I am sure most of us feel like this once in a while :-) !

I asked myself what the circumstances were when I impulse spent, and here are few things that come to my mind as the most prominent ones:

  • When grocery shopping, I found it was primarily related to me being hungry or thirsty at that time. Yes true, I would end up buying food or drinks that were a “deal,” looked new or was something I not tried before.
  • Another instance of impulse buying happened whenever I went out without a grocery list on my phone or in my head. Whenever I went without a list, I would scan through every aisle. There was always something I found enticing to buy at that time I but never used it after the purchase. Ultimately, I threw it out.
  • Whenever I was with a couple of my friends who are extravagant shoppers, I would end up picking stuff that I really never needed, just by visiting the store they needed.
  • In the mall, the big sales boards and nicely decorated or presented products would catch my attention. Yes, gals or guys, a good presentation makes a lot of difference in our spontaneous buying decisions.
  • If I was not in a good mood, I would end up making more impulsive purchases that used to only bring temporary joy.
  • Whenever I had extra money coming in from a bonus or a second job, I was tempted to buy the latest electronics.

 Impulse buying brings short term joy; financial planning brings long term joy and freedom!

 I guess most of us would agree to the above. All I would say is, that we all need to get better managing it. I know we will never be able to perfect it and we don’t really need to perfect it. At times, trying to perfect anything can become unnecessary stressful and we forget to enjoy ourselves. We surely don’t want that, so we just need to get better at our impulse drive! Here are few things to try out before making a purchase:

  • While going grocery shopping, we should either make a good mental list or a quick list on our phone. Once you get into the routine of sticking to a list, you will feel good not just because you save financially but you are not wasting food!
  • In today’s Internet world, we knowingly or unknowingly subscribe to so much stuff online which can easily be delivered to our mailbox. Last year, I remembered that I unsubscribed myself from quite a few websites, and just stayed subscribed to only those which I believed were valuable for me. This will not only reduces our temptation, but also it saves time from reading through that stuff.
  • Make a list ahead of time rather than making impromptu buying decisions. It helps a lot.
  • If you like something, give yourself some time before making the purchase. Research it online and in the stores. Ask yourself in the form of quick pros vs. cons related to your need vs. your want to buy that item.
  • Avoid shopping with extravagant friends. That does not mean you should stop friendships, just skip shopping with them if you can J!
  • Think of charity. Award yourself with an act of charity when you save several impulse purchases.

 There are plenty of ways to get ahead. The first is so basic I’m almost embarrassed to say it: spend less than you earn. - Paul Clitheroe

Apr 07

Budgeting: How small cutbacks lead to Smart Savings!

There are several big stuff that I have detailed in my book and how we should be leveraging my 80-20 model of my book to address them from our personal finance standpoint. This is my second blog that is focused more towards the smaller stuffs that are small but when added together could potentially lead to some noticeable smart savings in the long run. My previous blog post (An inside look at some of the smaller spending statistics) touched on similar small stuffs that add up in the log run, in this blog I am keeping the focus just on the home front related potential saving areas. Here is a good visual that very well touches on the small “sensible” cutbacks that we can do that would lead to great smart savings. It’s a decent visual representation of the key areas one can consider for savings within the home: attic, bathroom, kitchen, dining room, living room, home office, basement, garage and more!

Budgeting: How Small Cutbacks Lead to Great Savings. Source: Personal Finances from Quickens

Budgeting: How Small Cutbacks Lead to Great Savings. Source: Personal Finances from Quickens

Sourced from: Personal Finances from Quicken