Spontaneous purchases can cost the typical consumer as much as $5,400 a year, according to Slick Deals. That tally includes everything from tossing a candy bar or magazine into your shopping cart while waiting in line at the register to one-click "Buy Now" purchases on Amazon and impulse buys from enticing ads on social media.
"When you're not fully present in the moment, you may not take full stock of what your financial decisions mean," says Riley Adams, a Bay Area-based CPA who runs the financial website Young and the Invested.
Distractions come in many forms. A May 2019 study from the Journal of the Academy of Marketing Science found that using your phone while shopping led to more unplanned purchasing. A quarter of Americans have admitted to shopping online after they've been drinking, leading to nearly $40 billion in purchases made under the influence.
Making a few easy moves can give you more control over your purchases, limiting impulse or distraction buys and saving you real money. Try these tactics that may help you be more mindful when you shop:
Using cash instead of a credit card can help you avoid overspending because it helps you better understand the financial consequences of each purchase. It means you're more likely to feel the"pain of paying," says Jeff Kreisler, editor-in-chief of People Science and co-author of "Dollars and Sense: How We Misthink Money and How to Spend Smarter," told Grow last year. And that could make you rethink a purchase you don't actually want or need.
Try carrying big bills, like $100s or $50s, too. The reason this works is that our brain sees these bill as "special," and we become reluctant to spend them, Atlanta-based psychologist Mary Gresham told Grow last year.
Video by Courtney Stith
Social media grooms us to spend money by serving up ads and content related to our interests. Limit that by unfollowing accounts that offer up content tempting you to spend, and loading your feed instead with more inspirational people or hashtags focusing on smart money choices.
If that's not enough, you can always try curtailing the amount of time you spend on problem platforms, or even take a break from social media for a while.
One way to avoid spending money is to limit how much you can get your hands on. Set up automatic transfers to your savings and investing accounts so you have less available in checking.
It's a trick that Grammy-winning songwriter Kandi Burruss uses to curb her impulse spending. Her reasoning: Accessing that money takes more time, which helps you think through whether a purchase is truly worth it.
In some cases, the distractions happen after the initial purchase. For example, Adams says, many subscription-based retailers know that some consumers will forget they signed up or gloss over how much that recurring expense adds to their monthly spending. Because of that, 84% of people underestimate how much they spend each month on subscriptions, according to a 2018 survey from Waterstone Group, and half were off by $100 or more.
Regularly review statements for your credit cards and checking account. That way, you'll notice any patterns around impulse spending, or subscriptions and other recurring transactions that you've forgotten to cancel.
"Your mind's always looking for a dopamine fix," Adams says, "and sometimes making an impulse purchase can provide a quick hit." Simply being aware that you're prone to making impulse purchases can help you be more aware and take steps to avoid them.
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