How to Save Money When Buying ito sputtering targets

Key takeaways:

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1. We’re all guilty of impulse buying, but it can be hard on your finances.
2. Emotional shopping, being influenced or manipulated into making a purchase, or simply not planning ahead can lead to impulse buying.
3. By budgeting for impulse purchases, you will allow yourself to still have fun while protecting your budget. 

Let’s be honest, because we’ve all done it ... gone into the grocery store or the warehouse club, and suddenly an extra item jumps into your cart. Or you stayed up late one night web surfing, and then a box magically arrives at your doorstep. Whether it’s a ‘deal just too good to pass up’ or something you didn’t even know you needed but just had to have, impulse buying can put a big dent in your finances. 

What is impulse buying? 

Regardless of whether it’s a written shopping list or a mental note, most of us plan our purchases on some level. But when you order something online or walk out of the store with something that simply wasn’t on your mental radar, it’s called impulse buying—making an unplanned purchase. 

There are a lot of reasons we make impulse purchases. Some impulse buying is emotional—you’re bored or hungry, or you’re envious of your friend’s new coat. Another cause is influence, whether you’re following someone online, targeted by advertising, or just getting lured in by an overzealous salesperson. And sometimes it’s just from a lack of discipline over finances, a failure to separate wants from needs.  
 
When you don’t have a plan to manage your budget, much of what you buy becomes an unplanned purchase. And in no time at all, your budget is busted. 

Why should you avoid impulse buying? 

Lack of control over purchases can quickly derail your finances. When you shop intentionally, that is, when you thoughtfully buy only items that you actually need or planned for, you will be much better able to stick to a budget. And when you avoid impulse buying, you are also better able to manage your credit card balances, since you’re not surprised by how much you owe each month. 
 
Some of us just love to shop, and that’s okay. But if you’re shopping because you’re having a bad day (often called retail therapy), if you’re motivated to buy something because it’s on sale, or if you find yourself at the mall because you’re bored, take a step back.  

8 Ways to prevent impulse buying

Overspending can be stressful. Here are eight ways to step away from impulse buying. 

1. Make a budget—which includes ‘fun money’—and stick with it

A budget is your roadmap to financial success because it gives you a spending plan with specific limits. It’s healthy for you to give yourself permission to spend freely, as long as it’s for planned, budgeted purchases. This moves your purchasing decisions out of the ‘impulse buy’ into the ‘planned purchase’ category, which protects your financial goals. Some people think of a budget as a buzzkill, but it can—and should—include a line item called ‘fun.’ When you plan for fun purchases, it actually helps prevent binge shopping. 

2. Pay yourself first 

This budgeting strategy has you first set aside money for savings, such as retirement or an emergency savings fund, and then you pay for your ‘needs-based’ living expenses like rent or mortgage, groceries, and utilities. Whatever’s left over can then be used for non-essential ‘wants’ like dining out, travel, and others—including a ‘whatever’ budget for impulse purchases. You can get started on the ‘pay yourself first’ plan by automatically transferring a predetermined portion of your paycheck to savings; you’ll then get used to spending what’s left each month. 

3. Identify your weaknesses (and curb them) 

It’s time to hide the cookie jar. Do you fall for online ads? Are you swayed by influencers? Unfollow them or unsubscribe and remove the temptation. Some platforms even allow you to modify your ad settings or pay for an ad-free experience; just be sure the cost of the subscription is worth it. You may want to avoid the platform entirely or unsubscribe from tempting . It’s also helpful to remove your credit card information from online stores because it makes you think twice about the purchase when you’re typing in the number.  

Sometimes all it takes is to recognize the risks. Retailers manipulate you by stocking appealing impulse merchandise on end caps and near the checkout lines, so resolve to avoid picking up unplanned items in these areas. Or, if you find that things like shoes, tools, books, or sporting equipment jump into your cart, you may also try avoiding those types of stores altogether. 

4. Shop with an agenda 

You’ll be surprised how helpful a plan can be. For example, check your pantry, set a meal plan for the week, and then build your grocery shopping list around that. Besides focusing your grocery purchases, this approach will also help you save money on take-out, drive-through, and spur-of-the-moment dining out. It’s also a good idea to plan for gift giving. For example, decide up front how much you want to spend this year on birthday gifts. Track your expenses for each person and stop spending when you reach their limit. If you struggle with impulse purchases in the big box stores or the warehouse clubs, make a list first and then vow to stick with it.  

5. Don’t shop hungry, angry, lonely, or tired (H.A.L.T.)

Emotions have been proven to be closely tied to impulse purchases. Check your mood before making a purchase to be sure the item is necessary and not a reaction to how you’re feeling. For example, many online impulse purchases are made late at night by people in bed on their . Help yourself out by vowing to leave items in the cart until morning. Giving yourself this extra time will help you cool your purchase. Delete shopping apps from your . When you must visit the store’s website and log in, even this little bit of extra effort can give you reason to pause. And if you’re prone to entertaining yourself by shopping, look for something else to fill your time. Go for a walk, pull some weeds in your garden, or watch a favorite movie instead. 

6. Leave your impulsive friends behind

At the store, that is! It’s a good idea to talk about your challenges so people can support you along the way. If impulse shopping is a problem for you, shop only with a responsible buddy, someone who supports you and your financial goals. Step away from social media for a while and remove retail apps from your if you struggle with impulsive online shopping.  
 
Another tactic is to just use cash. For example, do you find yourself spending more at restaurants because your group wants to split the bill, even though you limited yourself to a salad? Let them know up front how much you plan to spend and use your limited cash as an excuse. 

7. Try a no spend challenge 

While this can be a good way to teach yourself discipline, you can also make it a fun game. For example, use the month of January to only eat food you already have in the freezer or pantry instead of buying new. Stop dining out during the month of July and spend more time barbecuing in the backyard. Step away from getting pedicures from October through April. Avoid the mall for a month or compete against yourself or your friends to see who can go the longest without an online purchase. 
 
Another tactic is to force yourself to get rid of something before you buy something new. For example, if you find a new sweater you think you want, resolve to first give an old sweater away before you can buy the new one. This delays the purchase, and makes you consider how much you really want the item. 

8. Give it time 

Time is on your side here. Put 24 hours between you and a purchase to let yourself consider whether the item aligns with your personal and financial goals. Often, all it takes is to step away from the item for a bit to help put the purchase into perspective. Avoid being manipulated by a ‘limited supply’ or a ‘sale ends tonight’ message. These are common sales tactics; just don’t fall for them. Maybe even consider imposing a mandatory 24-hour waiting period on all purchases over $100 to give your money some breathing room. 

A better approach: planned spontaneity

This past spring, I was out for dinner with friends, and one of the couples brought up the topic of budgeting.

It’s something that had been on their minds, and they were trying their best to get their finances together and begin aggressively saving.

We had a long conversation about the different strategies people are using to save more money. One of the ideas they brought up was an often-referenced argument that over your lifetime you could save six figures by not buying coffee.

COFFEE MATH

If you run a Google search, you’ll find numerous articles about how much you could save if you took the money you spend on coffee and instead invest it over a 30+ year timeframe.

Let’s say you spend $4 on coffee each day. If every morning you decided to battle past the temptation of a joyous warm cup of Joe and instead invested that money at an average return of just 6%, over the course of 30 years, that money could turn into close to $114,000.

So, it’s true. If you were to save every penny spent on coffee and invest it, it could end up being a sizeable win for you down the line. But at what expense to your daily happiness? After all, isn’t the reason we’re working and earning money so we can meet our basic needs and then hopefully provide the ability to enjoy the little things in life?

Personally, I feel that if grabbing that hot cup of Joe in the morning is something you enjoy, go for it!

Battling with yourself every morning over if you should or shouldn’t be buying a $4 coffee will drive you mad.

Plus, there are much bigger areas for you to focus on saving money that can have a much larger impact on your financial goals.

FOCUS ON BIG WINS SO YOU CAN ENJOY THE LITTLE THINGS

A better use of your time is to focus your effort on optimizing savings on the biggest purchases, and then work your way down to smaller things like coffee.

Research has shown that every time you contemplate something or make a decision, you draw upon finite amounts of brain power. Once you’ve used up a large portion of this brain processing power, you begin to experience difficulty when faced with complex problems/choices.

The reason this is important is because every time you stop to debate if you should or should not buy something, you utilize this brain power. If we assume you have a certain amount each day/week/month, then you want to make sure you are using it in the most productive way possible. Focusing your efforts on things like coffee each day probably isn’t the best use of your brain power.

This doesn’t mean you should never create a budget and understand where your money is going; it means you need to be smart about where you focus your efforts.

Let’s look at a list of the areas you can direct your focus and have the biggest effect on your success.

AREAS TO FOCUS YOUR EFFORTS

If coffee isn’t the best area to focus your brain power, where should you?

Here are a handful of areas you should consider putting in some real effort.

Credit Score

I bet you weren’t expecting this to be the first thing to focus on, but your credit score is one of the most impactful areas in which to make positive changes.

Your credit score dictates the cost of many purchases in your life. Having a good credit score will help you get good terms and interest rates when you buy a home or car, and will qualify you for lower rates on credit cards and personal loans.

By putting a large chunk of your effort into increasing your credit score, you will create a cascading effect of benefits in all of the subsequent areas we’ll discuss. I’ll also show you just how much this could have an effect on each area.

In a future post, I’ll be writing about tips on how to improve your credit score, so be on the lookout.

Home Purchase

As you’ve probably heard, this will most likely be the biggest purchase of your life. A person’s home is usually the largest asset they own, and it can be where they spend the most money over their lifetime.

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There are two ways to save on a home purchase. You can either negotiate like a pro, or you can just focus on less expensive homes. Better yet, you can focus on less expensive homes AND negotiate like a pro. Double win!

I’m not going to try to calculate the financial effect of buying a less expensive home because it’s too subjective for me to create hard numbers. Each region of the country has different spreads between “expensive” homes and “cheap” homes. We’ll just focus on the national averages, as well as negotiating.

The median home price in the US in was $188,900. Also, depending on your credit score, your interest rates could vary by up to 1.5%. I’m seeing rates as low as the 3’s, so let’s assume you could have an interest rate between 3.75% and 5.25%.

If you have excellent credit and would be able to get close to that 3.75% interest rate, over the course of a 30-year mortgage on the median US home cost, you would pay a total of $314,936.

If you have a poor credit score and got an interest rate closer to 5.25%, you would end up paying a total of $375,522.

Wow!

Over the course of the mortgage, if you had an excellent credit score, this means you would save around $60,586.

Now, let’s say you were able to negotiate a 10% reduction in price (This might mean you have to keep looking until you find an owner willing to negotiate). Over the life of the mortgage, that 10% reduction in price will equate to an additional savings of $31,492.

So, by having an excellent credit score and negotiating, you will have created a windfall of over $92,000 in savings.

And the best part – once you’ve locked this in, you don’t have to do anything for the remaining 30 years to experience these savings.

Education Costs For Children

With the exponential rise in college tuition over the last couple of decades, paying for your children to go to school has now become one of the biggest expenses a family can incur.

The average annual tuition for a public university is $9,650 (in-state), $24,930 (out-of-state), and for a private university it is $33,480 (Tuition Stats). Multiply that by 4 years and you will pay somewhere in the range of $38,600 and $133,920 for each kid. And those are based on averages and don’t include a further price increase.

Another way to lower the cost is to invest a lot of time proactively seeking out scholarships. Most people are unaware of just how many scholarships are available. But with some real digging, you can find thousands of additional dollars to help toward your child’s education.

Let’s say your child goes to an in-state public school, forgoing the high-priced private university. And let’s say you are able to get an additional $5,000 per year in scholarships (This is not a stretch if you look at the number of potential scholarships and are willing to do some work).

By taking these steps, it could end up saving you over $115,000 for each child.

Wedding

Whether it’s your own or you’re paying for your child’s, weddings have a way of racking up the bill rather quickly. I am hearing more and more about people spending over $100,000 (and I’m not talking about celebrity weddings).

Yes, it’s your special day, but does it have to cause such a financial strain on your long-term lifestyle?

The average cost of a wedding in the U.S. in was $35,329.

I have two close friends who were able to put on an amazing wedding and keep the cost under $10,000. I’ll tell you first hand that it was just as good (if not, better) than a lot of the high-priced weddings I’ve been to.

My friends’ decision to keep wedding costs under control helped them save over $25,000 versus the average. Great job!

ADDING IT ALL UP

If we add up the savings on these three areas, the total savings comes to a whopping $332,000!

You can see that the impact you can have by focusing on the big-ticket items will far outweigh fretting over your $4 coffee each day.

If you are able to do both, more power to you!

But if you’re finding it difficult to be successful in all areas of savings, then make sure your energy is going to the most impactful endeavors.

BUT THAT’S NOT ALL

I purposefully left something out until now.

The math that is always calculated on how much you are losing by buying coffee each day doesn’t just factor in savings; it factors in lost investment return. For us to create a true apples-to-apples comparison, we need to calculate how much we could have grown our savings into by investing it.

I ran the numbers based on the same investment return that is typically used in the coffee calculation: 6%. Each of the areas has different timeframes for how long you will be able to invest, so I adjusted for that as well. I also used national averages for things like age of marriage, retirement age, etc.

So, what was the final number we get for how much of a positive financial impact you could have on your life by just focusing on these three areas?

Grand Total: $782,860!

That’s enough to fund your coffee addiction and still have over $650,000 left over. Not too shabby.

TREAT YOURSELF

As you can see, by focusing on these big areas you can have a huge impact on your long-term financial success. And this is just three purchases. We didn’t touch upon things like a car purchase, buying electronics, household furniture, medical bills, etc.

Some of these areas can be massive undertakings and require a lot of time and effort. While you’re putting in the work it takes to be successful, you’ll find you often need to take a break and reenergize yourself in order to keep going.

Heck, while you’re recharging the batteries, go treat yourself to a hot cup of coffee, or maybe a venti mocha with whipped cream. I know I do!