5 Ways To Curb Impulse Spending Business

Since the COVID-19 vaccine began to be available, there have been more opportunities to spur spending on items and experiments that you couldn’t enjoy at the start of the pandemic.

With the freedom to do more, consumers spend more. For the first seven months of 2021, retail sales increased 15.5% in the United States compared to the same period in 2020, according to calculations by the National Retail Federation.

As some restrictions loosened, it’s likely that you had new spending needs: returning to work, visiting friends and family, and participating in other return-to-normal activities. But when the non-essentials threaten to put your finances at risk, it’s important to keep your financial goals on track.

Here are five strategies to help you manage impulse spending.

1. Wait a day or two

When you get that overwhelming urge to spend, wait 24 to 48 hours to see if you still want an item, suggests Brad Klontz, a Colorado-based financial psychologist.

“Ask yourself: can I afford this? Where am I going to put it? What will I think of this purchase tomorrow? How am I going to pay for it? ” he says.

He adds that this break can help calm the “emotional brain” and activate the “rational brain,” the one that holds you accountable tomorrow.

If you can’t bring yourself to wait, a store’s return policy can come in handy in case of regret. The return protection guarantee on a credit card, if available, may also offer a backup option. When you make a purchase with the card that offers the benefit, it may provide a window of time to file a claim and receive a refund when a retailer’s return policy fails.

2. Adopt Safe Credit Card Habits

Credit cards can help or hurt, depending on how you spend. Klontz says people spend a lot more money when they use their credit cards rather than cash. He suggests keeping a cash envelope to use in areas where you tend to overspend, like dining out, for example.

Plus, minimize impulses by not storing credit card information on websites or apps, says Kathy Longo, certified financial planner and president of Flourish Wealth Management, a financial planning firm in Minneapolis.

“It’s a lot easier to be like, ‘I’ll look at this later because I’m not going to get my purse and get my credit card,’” she says. This time can indirectly make you rethink a purchase.

After you’ve charged a purchase to a credit card, pay it off in full to avoid interest and save money. For large purchases, consider using a card with an introductory zero percent APR.

3. Use curbside pickup

Many retailers have offered curbside pickup since the start of the pandemic. It’s an option that Massachusetts resident Lauren Miller uses to stay on track on her debt-free journey.

Avoiding inside the store means “you don’t see those seasonal items and flashy marketing strategies,” she says. These can often lead to impulse buying.

Some retailers may charge for curbside pickup or require you to spend a certain amount to forgo the cost. You’ll need to assess whether it’s worth paying a few dollars to avoid the potential cost of impulse spending.

If you have to go to a store and the urge wins, do an online price comparison of the item, suggests Longo. “See if you can find something similar for a better price or maybe on sale,” she says.

4. Give yourself an insanity allowance

Include a personal allowance in your budget for potential essentials purchases. When Miller started cutting back on impulse spending, she gave herself $ 20 to use at each store. Over time, that amount dropped to $ 5 per store as she got used to it. As she only visits about four stores per month, the total does not cut into her budget.

“The desire to make impulse buys is decreasing, I think, because I know I have permission to make an impulse buy if I want to,” she says.

If you go over your allowance, take that amount out of next month’s budget or top it up by redeeming your credit card rewards for cash back or a credit on your statement if that makes sense. (Some credit cards decrease the value of rewards when you redeem them for certain options.)

But if impulse spending constantly pushes you to stray from your budget and into debt, it might be time to reassess your spending habits or speak to a credit counselor or financial therapist.

5. Find a responsible partner

An accountability partner can help you break down your reasoning for a purchase. They don’t have to offer an opinion, just an ear. The goal is to hear you talk about it out loud and make a decision that aligns with your goals and values, explains Klontz.

He suggests choosing a spending limit that merits discussion. For example, if a purchase exceeds $ 100, it may be worth executing by a responsible partner. Another option is to use social media followers to stay responsible. Miller, as a content creator on YouTube, documents her progress on social media platforms by sharing her plans for sticking to a shopping list.

– NerdWallet via AP

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