Its Saturday morning and you go to the department store to purchase a specific item. You find what you’re looking for and on your way to the checkout lane it hits you. That remote control that also serves as a coffee maker and toenail clipper accompanied by a big red tag 60% off markdown.
Ah, you’ve always wanted a remote control that also clips your toenails and brews your coffee. Your heart rate goes up and beads of sweat bubbles out of the skin on your forehead. You really want this remote. Before you know it you’re at the register and the cashier rings up your total: $78.45. You reach in your pocket and pull out the two twenty dollar bills that you set aside for the purchase of that printer cartridge that you needed. This means that you’re $38.45 short of the $78.45 total that was rung at the register. A showdown ensues. You look at your two twenties then at her. She looks at your two twenties then at you.
Now you’re holding up the line and a decision has to be made. Either forgo the remote control or make matters worse. In less than a split second you swipe your credit card mission accomplished. Now you’re walking out the store with the thrill of scoring the multipurpose remote control that you’ll pay 27% credit card interest on. This is an impulse purchase.
Impulse buying is a spur of the moment unplanned decision to buy a product or service much like the remote control purchase. Engaging in habitual impulse buying is very dangerous to your pocket book and repeated impulse purchases will dig a huge financial hole.
Most people know that its not smart to make impulse purchases but there are factors that trigger spur of the moment purchases such as sales promotions. The 60% off red tag is bright and grabs your attention even when its an item that you hadn’t considered before. Before you know it you’re picking up the item and inspecting it. If that item uncovers a want or need that hadn’t been realized before the sale, you might find yourself making a decision on whether or not to purchase the item.
Fortunately there are a number of things you can do to fight the temptation that leads to impulse purchases. Next time you go shopping you should make a list of all the things that you need to purchase and carry it with you. If you come across an item that you like and its not on your list it automatically goes back on the self. To make your shopping easier bring only enough money to buy the items on your list and leave your credit cards at home. Credit cards only compounds any financial difficulties brought on by impulse buying in the form of monthly interest charges.