Do you ever buy an item without thinking? This means immediately upon seeing a pair of shoes or a new outfit you like, you just pick it up and place it in your shopping cart or bag without considering the financial and other ramifications of the purchase.
Whether a large purchase, like a car, or a small purchase, like a pack of gum, most people impulse buy — at least on occasion. Retailers model their establishments with impulse buying in mind, placing common impulse purchased products strategically.
Although a small impulse buy — like a shirt or a pack of pens, for instance — can be innocent, impulse spending on a larger scale can lead to ineffectual budgeting, loss of savings, and poor personal financial planning. One estimate from the advertising agency Mediascope indicates the average American shells out $114,293 in their lifetime on impulse spending. This means we pay around $1,350 each year and $112 each month. Does that sound about right for you? This is enough money to pay a cable bill, or maybe pay for your household’s auto insurance.
A publication by AARP suggests that in your efforts to avoid impulse spending, you should make a “what the heck was I thinking?” list, containing items that gave you buyer’s remorse. Here is a list of common impulse buys that may just end up on your list.
1. Sale and Bargain Items
If an item is marked 50 percent off or bogo (buy on get one free), you are more likely to impulse buy that item. Mediascope indicates sale price as the single most motivating factor for an impulse purchase as it impacts 88 percent of your impulse buys. It’s really easy to be tricked by these marketing strategies. You may think to yourself: “Those shoes are $49, but they’re buy one get half-price, so if I buy those shoes and another pair, I am really getting a deal — two pairs of shoes for $73.50.”
Retailers have pricing these strategies in place that are designed to draw you in. Psychological pricing strategies like “two for one specials” and “BOGO” make you feel like you are getting a special bonus, when in reality, the one product you are paying for may be marked up to account for the discount on the other item.
Now, this does’t mean sale priced items are a bad thing. In fact, avoiding paying retail is the mark of a smart shopper. However, if you go into a store intending to spend $20 on a pair of flip flops, and you leave the store with two pairs of shoes that put an $80 dent in your wallet, you may need to reexamine your strategy.
2. Addictions and Habits
When you have the urge to take a puff, all of the colorful displays and large pricing signs make it easy to impulse buy a pack of smokes at the convenience store. For smokers, or even ex-smokers, impulse buying cigarettes is fairly common. A study by PubMed indicates that 38 percent of smokers who tried to quit in the past year had the urge to buy cigarettes after seeing them on display. That same study found that 33 percent of smokers who had recently quit were enticed by a cigarette display. You may have gone days, weeks, or even months without smoking and then when you notice your favorite brand is 50 cents cheaper, it makes resisting all the more difficult.
Wine and beer are also among the more common impulse purchases. Depending on where you live, you may find wine and beer in the grocery store while shopping, and think about how delicious a Cabernet would be with your dinner tonight.
Sometimes out at a restaurant or bar, people increase a bill exponentially with extra drink purchases. Your friends may be ordering specialty drinks at $10 or $15 each and you may think to yourself “hey, this is my night out and I’m going to live a little.” When you’re bill arrives, it’s $100 instead of the $20 you planned for.
3. A Dollar Here, A Dollar There
Have you ever gone into a dollar store to pick up one or two things and then left with 25 items? When an item costs $1 or less, you may feel less of a need to think about the purchase. Hey, it’s only 50 cents and it really doesn’t make much difference, right?
Dollar Stores have designed layouts so that impulse purchases are conspicuous to consumers, and each person spends more during their visit. That’s why you’ll see items like candy, hand sanitizer, and batteries in locations where you’ll notice them. Once you pick up all of the items you “could use,” you end up spending $25, instead of the $3 you were planning to spend on Halloween decorations.
Dollar menus and app stores are also common places where you can spend 99 cents here or $1 there without much consideration. Since each individual purchase is not too significant, you make these purchases on a whim (sometimes without counting each purchase.) For this reason, you’ll hear about those people who spend hundreds of dollars on mobile gaming.
4. Junk Food
Sometimes you plan to order a certain entrée at a new restaurant and then, when you check out the menu, you end up trying an appetizer as well. With menus showcasing each item and wait staff trained to suggestively sell the highest priced appetizers, it’s no wonder you ended up ordering the sampler platter.
The same applies during dessert with all of the delectable looking menu choices. Chocolate cake with a side of ice cream covered in hot fudge may not be something you eat on a regular basis, and it’s tempting to say “ah, what the heck, I’ll go ahead and treat myself.” As long as you don’t overdo it and you have enough in your restaurant budget for these extra purchases, treating yourself occasionally is no big deal. A problem only arises when you frequently exceed your budget and these extra purchases start to hurt your wallet.
Known for its attempts at enticing consumers into making impulse purchases, the grocery checkout candy is also tough to resist. Generally, any thought about the purchase of a candy bar pertains more to a diet or health, rather than the expense of the candy. Just as with restaurant dessert purchases, as long as this doesn’t interfere with other areas of your budget, this spending is generally harmless.
5. Home Décor
When you go to a department store, value store, or even online, it’s easy to impulsively pick up towels for the bathroom or a new shower curtain. Mediascope suggests that home furnishings, gardening supplies, flowers, and accessories are also all among some of the more common impulse purchases.
This category of impulse buying can become extremely expensive, with the price of a new comforter at around $100 and new curtains running upwards of $200 (and that’s for moderately priced curtains.) Since you can shell out some serious cash on home decor, it’s really best to plan these types of expenses.
While impulse buying certainly can be fun, it often creates a feeling of regret later on. It’s a good idea to add up the costs of all of the purchases on your “what the heck was I thinking list,” and then get an idea of what you could have bought with that money. A month’s mortgage payment, a vacation for the family maybe? If you bought these items on credit, you may still be paying for some of them so be sure to notate any credit purchases. As miserable as this sounds, seeing this total will help put things into perspective.