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 01

How to cut your Insurance Bills in 1-2-3 Easy Steps

Insurance is a commonly included item in most of our budgets. While the type of insurance may be different like home insurance, health insurance or car or insurance, it goes without saying that if you manage to save some money on your insurance bill, you can make a considerable difference to your budget as well.

Here are 3 easy steps to cut back your insurance bill and save some money in the process.

1) Pay Higher Deductibles

Paying more money to save money does seem a bit counter-intuitive at first. But here’s how it works. When you agree to pay a higher deductible, the insurance company looks upon this as a favor from your side. Now the insurance company decides to reciprocate by extending a discount in your insurance premiums. After all, you are taking off a burden off the company’s shoulders (albeit small) by paying a higher deductible until the insurance benefits kick in.

2) Many Insurances One Provider

It is very common for an average individual to have more than 1 type of insurance. Majority of the folks have insured their homes, their cars and their health with different insurance companies.

You may have chosen different providers because you were approached by them at the time of your need. But most of the insurance companies do not limit themselves to a single type of insurance. They do offer coverage for all major types of insurance.

What you can do is compare the different companies and then select one of them which has an affordable coverage plan. Now approach this company and intimate them of your decision to merge your other insurances along with the one you already have with them. So if this company is already providing you home insurance coverage, indicate that you would like them to handle your health insurance and auto / car insurance as well.

This is a win-win situation for both of you, because the insurance company gets more business and reciprocates by extending considerable discounts in premiums to you.

3) Don’t Stop Shopping

Don’t be under the impression that you need to stick with the insurance company you currently have. It always helps to look around for more lucrative deals. Chances are that you will stumble upon better discounts or better coverage plans if you look around.

The best way to do this is to keep track of the latest entrants into the insurance market, because these are the companies that are eager to land new customers and build their business. Subscribing to one or two popular websites that deal with review and updates about insurance companies should do the trick for you.