Have you ever thought about impulse buying and have wished you have a full control over your spending habits?
Let say you promised yourself not spend anymore so you can stretch the budget until payday. But when a friend have invited you at the Robinson mall, you just can’t seem to stop swiping the credit card to purchase a new pair of Nike shoes and a branded T- shirt.
Or maybe you had a scheduled to buy groceries during weekend, and you end up grabbing items that were not on the list. It’s hard to resist lowest sales offer at the mall and curb impulse buying behavior.
An impulse purchase simply means an unplanned decision to buy a product or service which has been secretly undermining your monthly budget. People nowadays embrace the culture of consumption which enables to succumb of purchasing to acquire more to make happier. After all, you only live once and so you have now to enjoy life to the fullest as the proverbial statement goes: “Aanhin pa ang damo kung patay na ang kabayo.” This kind of thinking triggers shopper to spend lavishly.
While it’s true that one’s wealth is worthless when he’s dead, impulse buying can certainly impact one’s financial lifestyle including his relationship with others.
What are the factors behind impulse buying?
There are some people who cannot resist the temptation of buying products which their friends have bought. The need to be accepted by other and wanting to belong is one reasons for buying impulsively.
When you cannot follow the latest trends and fashion amongst your friends, you will feel like you’re out of place. Imagine when everyone is using an iPhone 7 and other latest gadgets while yours is an old one.
2.Sense of competition
Sense of competition simply means needing to have what everyone else. A classic case of competition is about spending money on stuff you don’t need, to impress people you don’t like.
This habit will put you into debt if not control wisely. For instance, the social media is one major factor that contributes a sense of competition and has brought envy among Filipinos. When your friends posted pictures about their travel at Maldives, you felt you wanted to book a ticket to Hong Kong so you can also have pictures to show on Facebook or Twitter and other social media.
3. Showing off
This behavior is observed when a person decides to buy a new item on the market and show it to their friends that he has the “latest”. Man usually talked about their new cars and latest upgrade while women tend to show off something about fashion like clothes, jewelries, and latest gadgets.
Impulse buyers are more social, status-conscious, and image-concerned. However, showing off is simply the enemy of simplicity and frugality.
4. Temptation and appealing advertisement
Another factor of impulse buying is temptation. The mall sales and easy credit with zero percent interest are very tempting to consumers. It’s hard to say no to cash load and credit cards because it is easy to avail.
Furthermore, advertising industries use a strategy called “association” which means creating positive emotions connected to the product. For instance, sporting equipment companies use successful athletes like Lebron James or other TV personalities in their ads to create a strong psychological connection with customer. When a customer sees his idol endorsing certain products, he would hardly resist the temptation.
5. Credit card spending and delayed gratification
It’s convenient to own all kinds of credit cards that are available in the market. Although the idea about credit card is “use now, pay later,” it will incur penalties once you failed to pay balance on time. Since penalties are issued for late payments, this could be a problem when the little charges accumulate over time.
A person who often using credit card to purchase unnecessary stuff is eventually more likely to suffer financial distress. This is mostly happen when a person is failing to keep track of the balance in his various accounts.
After all, it’s more appealing to enjoy purchases now than to put your money in any investments that has a potential to grow over time. It’s pretty much similar with a marshmallow experiment conducted to children at Stanford University.
Researchers told the kids to select marshmallow, and that if they ate it immediately, they wouldn’t receive any more. If they could delay their gratification for a few moments, they’d double their marshmallows.
6. Out of depression
Some people tend to do shopping as an emotional relief or when they are severely depressed and they need to forget about work pressure. For instance, when you’re feeling blue and socially isolated, you shop.
It’s like an instant therapeutic solution that gives pleasure after making several purchases. Rik Pieters of Tilburg University have emphasized that loneliness can foster materialism, but materialism of the right type can reduce loneliness.
Curb spending when you are depressed and find healthy ways to address the issue. While you’ve been happy making purchases at the moment, remember to think of your financial goals.
Instead of becoming too attached with materialism, hang out with people who are constantly happy–even if they have lesser things. Explore healthy recreations which will give you real joy and happiness and oftentimes cannot be bought with money.
The central issue about spending is to find the right balance between satisfying your needs or wants when making purchases while at the same time managing your finances wisely. Ultimately, you’re the ones who are in charge of your financial decisions.
“His master replied, ‘Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things. Come and share your master’s happiness!’ —Matthew 25:23, NIV
P.S. 1. This article is first published in an on-line magazine, The Pinoy Legacy. Please click the button below to share this article.
P.S. 2 Are you an OFW? I encourage you to join Truly Rich Cub (TRC) if you want to be financially literate: Join TRC Today!