Curb the impulse to boost your hip pocket and your health

About four in five people admit to making unplanned purchases.

Impulse buying isn’t just bad for the hip pocket, it can also damage our emotional wellbeing. That’s the latest warning from the UK’s Money and Mental Health Policy Institute.

I’ve come across research saying 81% of adults admit to making unplanned purchases but let’s face it, what sort of person never impulse buys! A 2016 poll by MoneySmart found the supermarket is a key danger zone where two out of five Australians add impulses buy to their trolley.

The occasional unplanned purchase is harmless. Make a habit of it though and it becomes an easy way to overspend and even end up deep in debt. Just as worrying, research by the Money and Mental Health Policy Institute found as many as 63% of people regret their impulse buys, and chances are, the situation is similar here in Australia.

Part of the problem is that the traditional spending barrier of 9-5 retail hours has been replaced with round-the-clock access to shopping via the net. Yes, there is always the option of returning unwanted items purchased online but the UK research found three quarters of people didn’t return their last online shopping mistake.

The key to avoiding budget blowouts and lingering regrets about impulse buys is to curb the urge to go on a Gumtree-fuelled spending bender.

A good starting point is to know the danger signs. If boredom is a factor aim to keep busy. Instead of browsing the web during your lunch break, head out for a walk (just not around the shops).

Commit to giving yourself breathing space too. A bargain may be very tempting but wait a day or two and chances are, it will look considerably less like a great deal by then.

If bricks and mortar stores are your weak spot, leave your credit card at home when you hit the shops. Sticking to a debit card won’t leave you facing high interest debt, and knowing your bank balance is dwindling can be the cue to think twice about an unnecessary purchase. Or withdraw some cash and make that your spending limit.

To get a better idea of how much you’re spending on impulse, and the impact it is having on your financial wellbeing, try using one of the money tracker apps. The free TrackMySPEND app for instance, lets you record spending on the go. The results can be a real eye opener into where your money is going, and how you can cut back.

 

Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.

Discover a new way of banking

Imagine a bank account that helps you keep on track and tells you what's safe to spend.

Learn more

Managing your money

Find out how you can make a big difference to the opportunities and lifestyle you enjoy today and tomorrow with our online module.

Begin module

Budget planner calculator

Use our Budget planner calculator to assess your current financial position and how much you may be able to invest. 

Start budgeting today

Want to keep up to date with the latest news?

Sign up now

Recommended articles

Important information

Show more

© AMP Life Limited. This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.