Buying new things and receiving your new orders is indeed satisfying. After all, who doesn’t love to put on new clothes and get their hands on that new gaming console? But there is a problem! While you can shop to your heart’s content, do you give a thought to your financial stability? Are you spending more than you should? Have you analyzed your budget recently? Are you shopping on your credit card? Is overspending troubling you? Are you impulse buying? And the most important question- is it affecting your financial security? If the answer to most of these questions is yes, then it is time for you to look into your finances and spending habits carefully!
Let us dig a little deeper and understand the effects of impulse buying on your financial security!
But first, what is impulse buying?
Believe it or not, the joy of seeing an item you have been eyeing for months on sale is over the top! Why would you miss out on that pair of speakers? It has 50% off, after all! Right? But let us be real here, though it might be a great deal and you will feel happy for some time, you need to ask yourself will it affect your budget for the upcoming months? If you are swiping your credit card to order it, it will definitely cost you more than you would want. So, maybe, before rushing into buying something, stop yourself for a minute, and evaluate if you actually NEED that item or you just WANT it.
By definition, impulse buying is the tendency of a customer to buy goods and services without planning.
So, if you are still buying things impulsively, let us see how it can impact your financial security and long-term goals!
1. Hampers long-term goals
Let us say your long-term goal is to save money to buy a new car. You have set a budget to achieve that goal in the next 12-18 months. If you are an impulsive buyer, you might end up spending money from your pre-budgeted accounts and lose track of your savings, resulting in more than expected expenditure. Impulse buying is a cycle; if your impulse control is weak, you will purchase things you like at that particular moment but will soon lose interest in them and buy something new.
The main problem arises when you use the amount you have saved for a specific purpose or purchase things on your credit card. Spending money from your budgeted accounts will lead to a delay in your long-term plan. Moreover, when you purchase your credit card, you will pay the price of the item and accrued interest. Eventually, it will lead to overspending, and it will hamper your goal!
2. Increase your credit card debt
Oh, we know- swipe and buy is an easy thing to do! But what after that? Credit cards offer you a line of credit that one can use to purchase items, it is not the way of life, and one must not rely on it! But the problem with impulse buyers is that they treat it as an extra source of income and spend the money however they want. It is where the problem begins! Items purchased on a credit card always cost you more because you have to pay the amount back along with accrued interest! So, you might think that buying on a credit card is more manageable, better, and a win-win situation, but it is not! Impulse purchases with your credit cards would increase your credit card debt and make your financial situation vulnerable. So, before you purchase from a credit card, weigh the pros and cons!
3. Impact your financial security
Good financial health means financial security. You are financially healthy when your assets are more than your liabilities. Overspending and impulse buying will worsen your spending habits and negatively impact your financial future. More material possession does not mean more financial security. It is important to be prepared for unforeseen events in your life. Even if sold in emergencies, the material possessions will have low value and would not serve the purpose. In case of a crisis in the future, material possessions will not help and will impact your financial security.
4. Habits can get worse!
You do not realize when your habit of impulse buying turns into the practice of retail therapy. Even the slightest inconvenience would push you to buy something new to ease your anxiety and problem. This habit would drag you into the debt trap bit by bit without realization. It is essential to check your spending habits; bad spending habits negatively affect your financial and mental health, increasing anxiety and negative emotions.
So, now that you know the impacts of impulse buying on your financial security, let us see what you can do to avoid it and stay on track.
We can’t emphasize the importance of budget more! Make a budget, stick to it, make sure that you do not lose track. Make different categories and divide your income accordingly. It will help you to control your expenditure a bit.
2. Uninstall the apps
Temptations are always there, so, first, get rid of them! Delete the apps- be it a shopping app or a food delivery app, uninstalling them would definitely help you control your impulse as well as your money!
3. Invest & save smart
Your financial security depends on your assets, basically investments and savings. While your savings give you a financial cushion for the future, investments help make you financially independent. First thing first, start an emergency account to save for any unforeseen circumstances. And explore your options to grow your income by investing.
4. Say “NO” to credit cards
We know that it is a difficult step, but it is the one that will help you in the long run! Give your credit card to your partner, sibling, parents, or basically anyone who will not let you use it. It helps to curb overspending and control your impulse.
In a nutshell, impulse control is vital to curb overspending and impulse buying. Indulging in impulse buying negatively affects your financial stability. It might give you momentary satisfaction, but in the long run, it harms your financial future.
Are you struggling to repay your credit card debt?
If you are an impulsive consumer, you are bound to end up in the debt trap. Moreover, getting into the debt trap is as easy as buying new things, but getting out of it takes determination, willpower, and effort. So, let us be honest, if you are already in the debt trap, you need to take action to get out of debt. At FREED, we help people resolve their outstanding personal loans and credit cards through debt settlement, help them get debt-free, and save significantly on their outstanding debt. If you are currently struggling with your debts and are looking for help, reach us on 0124-6663666 or drop your details with us here.