5 ways to ‘rein’ in impulse spending

ince the COVID-19 vaccine started becoming available in the US, there have been more opportunities to impulse spend on items and experiences that you didn’t get to enjoy early in the pandemic.

With the freedom to do more, consumers are spending more. For the first seven months of 2021, retail sales were up 15.5% compared to that same period in 2020, according to calculations by the National Retail Federation.

As some restrictions have eased, it’s likely that you’ve had new spending needs: returning to work, visiting with friends and family, and partaking in other back-to-normal activities. But when the nonessentials threaten to put your finances in jeopardy, it’s important to keep your financial goals on track.

Here are five strategies to help you navigate impulse spending.

1. Wait a day or two

When you feel that overwhelming urge to spend, wait 24 to 48 hours to see if you still want an item, suggests Brad Klontz, a financial psychologist based in Colorado.

“Ask yourself: Can I afford this? Where am I going to put it? How am I going to feel about this purchase tomorrow? How am I going to pay for this?,” he says.

He adds that this pause can help calm the “emotional brain” and activate the “rational brain,” the one that holds you accountable tomorrow.

If you can’t bring yourself to wait, a store’s return policy may prove useful should regret set in. The return protection benefit on a credit card, if available, can also offer a backup option. When you make a purchase with the card that offers the benefit, it can provide a window of time to file a claim and receive a refund when a retailer’s return policy fails.

2. Practice safe credit card habits Credit cards may help or hurt, depending on how you spend. Klontz says that people spend significantly more money when using their credit cards instead of cash. He suggests keeping a cash envelope to use in areas where you tend to overspend, like dining out, for example.

Also, minimize impulses by not storing credit card information on websites or apps, says Kathy Longo, a certified financial planner and president of Flourish Wealth Management, a financial planning firm in Minneapolis.

“It’s much easier to be like, ‘I’ll look at it later because I’m not going to go find my purse and get my credit card,’” she says. That time can indirectly make you rethink a purchase.

Once you do charge a purchase to a credit card, pay it off in full to avoid interest and save money. For large purchases, consider using a card with a 0% introductory APR.

3. Use curbside pickup

Many retailers have offered curbside pickup since the start of the pandemic. It’s one option that Lauren Miller, a Massachusetts resident, uses to stay on track in her debt-free journey.

Avoiding the inside of the store means “you’re not seeing those seasonal items and those flashy marketing strategies,” she says. These can often lead to impulse buying.

Some retailers may charge for curbside pickup or require you to spend a certain amount to waive the cost. You’ll have to weigh whether it’s worth paying a few dollars to avoid the potential cost of impulse spending.

If you have to go into a store and the urge wins, do an online price comparison of the item, suggests Longo. “See if you can find something similar at a better price or maybe on sale,” she says.

4. Give yourself a splurging allowance

Build a personal allowance into your budget for potential must-have purchases. When Miller first started to curb impulse spending, she gave herself $20 to use at each store. Over time, that amount lowered to $5 per store as she embraced the habit. Since she frequents only about four stores per month, the total doesn’t dent her budget.

“The desire to make impulse purchases lessens, I think, because I know I have the permission to make an impulse purchase if I choose to,” she says.

If you exceed your allowance, take that amount out of next month’s budget, or supplement it by redeeming credit card rewards for cash back or statement credit if it makes sense. (Some credit cards lessen the value of rewards when you redeem for certain options). (AP)