By Younas Chaudhary
As a child, living in a remote village in Pakistan, I never purchased anything on a whim. We had a barter system whereby traders would exchange their services for seasonal crops. For example, haircuts, shaves, nail trimmings and similar services were regularly provided by a local barber to all villagers for an agreed amount of wheat, rice, corn, or other crops depending on the season.
Life was simple. There was no window shopping, no malls or internet to lure me into buying anything. However, I came to the West and learned how to buy stuff on a whim, also called impulsive buying.
According to an annual survey by Slickdeals, Americans increased impulse spending by 14% in 2022 compared to 2021. The average person now spends $314 per month on impulse purchases, up from $276 in 2021 and $183 in 2020. Moreover, the amount that an average person is willing to spend on a single item has also gone up to $310, from $277 in 2021 and $157 in 2020.
This data is troubling as we are currently going through an inflation. What makes someone buy so much on a whim? Psychologists cite multiple reasons. We become obsessed with material possessions that we dream of owning. This dream becomes a reality when we indulge in buying a certain item without considering its value or price.
We also fail to teach children the basics of money management. Children whose parents live paycheck-to-paycheck and use credit cards tend to follow those poor habits. No number of stickies on your fridge or financial planning classes will help educate children on the basics of financial planning until parents show the way at an early age through their own deeds and actions.
Showing off our status to others is another factor that leads us to impulsive buying. This reminds me of financial guru, Dave Ramsey, who opens his shows by saying that owning a fully paid home is a status symbol of choice rather than driving around broke in a BMW.
Advertisers stalk impulse buyers by constantly luring them to buy things they do not need and reinforce the false notion that such purchases will increase their social status. There is only one defense: self-control. And that is the hardest thing for average human beings to practice. How can you resist the constant temptation of online buying, of ease, convenience, and the comfort of doorstep delivery?
I am shocked by people who make their lives miserable by signing off impulsively on huge home mortgages without understanding how much they can afford. Impulsive buying happens often in hot real estate markets, and some will do everything to inflate their income to secure a home loan.
Lured by data-driven marketing, retailers know how to position their products so that customers are tempted to buy impulsively. For instance, you will see a variety of candies, soda, gums, cigarette lighters, and similar items at the cashier checkout counters, that are purposely placed there to entice you into impulsive buying. Little does someone realize that when they buy these items, they forget bread or milk for the family.
So, let us try to stay within our means and budget, especially in tough economic times by not buying things on a whim. Like gambling, this too will become a costly bad habit. Blessings!
The views, thoughts, and opinions expressed in this article are my own and do not represent the opinions of any entity with which I have been, am now, or will be affiliated. Further, I make no warranty regarding the accuracy or effectiveness of my recommendations, and readers are advised to consult other advisors as well as their own judgments in making business decisions.