We have all been a perpetrator of impulse buying. We all know what it’s like; that sudden feeling that you absolutely need to buy that one thing you walk by sitting on the shelf.
You write down the list of things you need to purchase before going into the store, but somehow you walk out with twenty other items that weren’t even on your mind before walking in, let alone on the actual list. You’re scrolling through an online store, only to be convinced you positively need that new gadget you had never even heard of ten minutes ago.
The Ease of Online Purchases
With the growing popularity of online purchases, habitual impulse buying is more common than ever. Consumer research is providing corporations with better marketing strategies than ever to encourage impulse buying to benefit their bottom line. And while impulse buying can be fun in the moment and it is a socially accepted behavior, most consumers are aware it’s not always the best move for financial health.
How does impulsive buying behavior affect us? When it happens only occasionally, and you have a good amount of wiggle room in your income, it might have a minimal impact on our overall financial situation.
However, if it is an ongoing issue, then these kinds of impulse buying decisions could result in negative consequences that harm your financial well-being.
Difference Between Impulsive and Compulsive Spending
There has often been a mix-up in terminology between impulsive buying behavior and compulsive buying behavior. These terms are often used interchangeably when there is actually a significant difference between the two.
Impulse buying and compulsive spending are different in their internal motivations. Consumer impulse buying tendencies usually consist of unplanned purchases, while compulsive buying behavior tends to be more purposeful and planned to relieve negative emotions.
Actual impulse buying is spur of the moment for immediate gratification that usually has to do with external factors. In comparison, compulsive spending is not all unplanned purchases and can quickly become an addiction because of the deep internal psychological factors at play.
Impulse buying behavior is an enduring consumer trait that can have negative consequences if left unchecked. However, compulsive spending can become far more damaging if it becomes an addiction.
What Consumer Research Suggests Is Behind Impulse Buying Behavior
There have been many studies done that attempt to explain consumer behavior and why impulse purchases occur. Researchers have been curious as to what cultural factors and marketing strategies have the most considerable influence on shopping behavior and unplanned purchases.
Consumer research suggests that a wide array of factors affect impulse buying decisions, from marketing strategy to the shopping environment. All manner of sensory and psychological factors could trigger impulse purchases in consumer buying behavior.
External Factors Encourage Impulse Buying
Typically, impulse purchases arise from an external trigger and the consumer’s internal reaction to it. These external triggers might look like advertisements that bring about positive emotions or store environments that encourage impulsive purchases.
Most often, the unplanned purchases that result from impulse buying tend to look like this: you see something, you want that thing, you buy that thing, and you have immediate gratification. It was not a part of the consumer’s purchase intention but rather a marketing strategy or store atmosphere that brought about the impulse purchase.
The Negative Impacts of Impulse Purchases
There are many ways in which your life can be negatively impacted by persistent impulse buying behavior. One impulse purchase every once in a while won’t be too big of a deal. However, too many impulse purchases can eat away at your monthly budget, leaving you struggling to pay your regular bills.
Persistent, repetitive purchasing behaviors that are impulsive can seriously harm your finances if you are not careful. Here are some of the possible consequences of impulse buying behavior:
- Living Paycheck to Paycheck
Consumers with an impulse buying trait are more likely to struggle with living paycheck to paycheck. Making impulse purchases often will leave you with significantly less money for your monthly expenses.
Unless you have a substantial disposable income, constant impulsive buying could have you spending every paycheck by the time you receive the next one. This is a dangerous position to be in as, if you have no savings, you could be one emergency away from a financial disaster.
- Buyer’s Remorse
Once you get that immediate reward after an impulse purchase, negative emotions might follow. When you buy something without thinking it through, the likelihood that you will experience buyer’s remorse is much higher.
You likely have had prior impulse buying experiences where this has occurred. You make an unplanned purchase and experience that rush of positive emotions, a release of dopamine in your brain.
After the dust has settled, you begin to feel uneasy. You realize the decision was an impulse buy, and you didn’t really need the thing you were convinced you needed. Then you look at your bank account, and the buyer’s remorse really starts to kick in.
- Unmanageable Debt
Consumer credit card use can significantly contribute to impulse buying behavior because revolving credit allows you to spend money you don’t actually have. Credit cards will not only make impulsive buying more tempting but also more risky.
Stacking up impulse purchases with your credit cards could leave you with unmanageable debt. You may get charged with extremely high-interest rates every month to pay for your impulsive buying habits.
No positive emotions in the moments after an exciting purchase is worth sky-high minimum payments that you can no longer afford on your credit card bills.
- Bad Credit
Irresponsible consumer credit card use for impulse buying can also harm your credit score considerably. When impulse buying behavior gets out of control, and you rack up debts you cannot afford to pay back, your credit utilization ratio increases, and your payment history worsens.
Having bad credit can affect many different areas of your life, from where you can live to what kind of loans you can be approved for. Loans for people with poor credit usually have high-interest rates.
The only way you will be able to reverse the effects of consumer impulse buying on your credit will be to minimize your impulse purchases and pay down your debt.
- Restricts Your True Potential
Even though following your buying impulses might satisfy that desire for an immediate reward, you could be limiting your potential in the long run. When you skip over the typical consumer decision-making process to purchase something without thinking it through, you are spending money that could have been put towards long-term goals.
When impulse buyers spend a significant portion of their income on unplanned purchases, they will be saving less to make their dreams come true. Think of what impulse buyers could do if they kept that money instead of spending it.
They could travel the world or pursue a desire to start their own business. They could save money to buy a home or start a college fund for their child. But fulfilling these dreams can become exponentially more difficult when caught up in regular impulse buying.
Is It Possible To Stop Impulse Buying?
To better avoid these negative effects of impulse buying, we recommend using strategies to stop impulsive behavior in its tracks. In attempts to explain consumer behavior, researchers have identified ways in which to minimize the likelihood of unplanned purchases.
Consumer research suggests that becoming aware of the sensory and psychological factors that affect you at any given moment while you are shopping could help curb the impulse buying tendency. Notice things like if you make more impulse purchases in physical stores compared to online shopping or the other way around.
Best Strategies To Reduce Impulse Buying
Taking a two-fold approach by using your willpower to stop impulse buying alongside determining what triggers impulsive behavior in you personally will give you the most long-term success. It is important to remember that not all unplanned purchases are a bad thing. Being too hard on yourself is counterproductive.
However, if impulse buying has become a habit that has begun to affect your finances, here are a couple of strategies you can use to cut back on those unplanned purchases:
Sleep on the Decision
When urges to make impulse purchases arise, wait a day or two to complete them. It might be hard to immediately tell yourself you cannot make the purchase you are considering full stop because, at that moment, impulse buyers are often convinced they need it. Instead, say to yourself that you can sleep on it, and if you still want to make the purchase the next day, you can.
This is particularly helpful for online shopping. You can load up your virtual shopping cart with online purchases and come back to the cart a day or two later. Only after you pause and lengthen the consumer decision-making process will you complete the purchases by checking out.
A lot of cultural factors contribute to the feeling of impatience and immediacy. But if you stop those in their tracks and wait just a short while longer, you can determine whether you really need to make the purchases without the fear of stopping yourself from buying something you legitimately need.
Don’t Spend Money You Don’t Have
Consumer buying behavior consistently becomes more impulsive when the money can be paid back later. If you want to cut down on impulse purchases seriously, consider stopping all credit card use. Especially if you are attempting to pay off debt from prior impulse buying, it is a good idea to stop adding to your balances altogether.
Consumers use all kinds of tricks to stop themselves from using their credit cards when shopping in stores or on websites that encourage impulse buying. Some people cut up their credit cards, freeze them in an ice block, or ask their spouse to hide them in a secret location in the house. Whatever you think might work, try it out.
Put Your Money in a Savings Account
If you need to stop yourself from spending the money, you have in addition to the money you don’t have, use savings accounts to your advantage. After receiving your paycheck, transfer the money you don’t plan to use for budgeted expenses into a savings account.
Savings accounts have withdrawal limits meaning you can’t keep transferring money out. When you are in situations that trigger impulse purchases, you might be less tempted to give in if you need to take several extra steps to complete them.
Knowing that you only are allowed four withdrawals or whatever your account’s limit is might give you pause before making a transfer. Limited funds being readily available could make impulse purchases occur less frequently.
Clearly Budget Your Expenses
Having a clearly outlined monthly budget will greatly reduce unplanned purchases. Budgeting expenses helps impulse buyers stick to their original consumer’s purchase intention.
By being fully aware of exactly how much disposable income you have each month, you are far less likely to overspend on impulse purchases. No one wants to miss rent or utility payments. If you know that a particular purchase will cut into your necessary expenses, you won’t be as susceptible to impulsive behavior.
Do a Spending Detox
Consider doing a temporary spending detox. There are many different types of detoxes you can do: a detox from online shopping, a detox from clothes shopping, or a full spending detox for all unnecessary expenses.
Stopping your spending altogether, even planned purchases that aren’t necessary for your basic needs can help you understand the psychological factors contributing to your impulse buying behavior.
You might find clarity on what positive and negative emotions stimulate impulse purchases for you. How does the store atmosphere influence your shopping behavior? Which marketing strategies have the most significant impact on you?
A thorough spending detox for two weeks or one month could enlighten you with the answers to these questions allowing you to move forward with a better understanding of your impulsive behavior.
The Bottom Line
While impulse buying is a socially accepted behavior encouraged by corporations through marketing strategies to get you to spend money, it can severely impact your overall quality of life if it becomes a common occurrence. If you find that your impulse purchases have taken over your budget, you have the power to take your purchasing power back into your own hands.
If you find yourself in a situation where the strategies mentioned above do nothing to improve the impulse buying tendency, it may be time to consider whether your spending habits have become compulsive. Compulsive buying behavior can be significantly harder to control and may require professional help from a mental healthcare provider or financial expert.