A woman passes by a shop. She sees a beautiful gown worn by a mannequin. It’s love at first sight. She wants that, but it is so costly. She opens her purse to check whether she have the credit card or not. Her face lit up. It is there. She enters the shop, lends a final glance at the sexy gown and then proceeds to the cashier counter. That’s impulse purchase.
After making the payment and possessing her latest purchase, she gets back to home. She displays it to her husband. He doesn’t like that. It’s not worth the fortune she spent. She stares at it. Now she too feels the same. She feels that it isn’t as good as she wanted it to be. There are already a couple of similar gowns in her wardrobe. She is now full of guilt. She makes up her mind that she’ll return it.
Next day she reaches the store’s customer service desk and says, “I want a refund.” The guy at the counter points to a board hanging above his head. She reads it, “GOODS ONCE SOLD CANNOT BE RETURNED OR EXCHANGED.” She’s sad now. She spent on a dress which she doesn’t like anymore. That’s the result of an impulse purchase. Now she has to make payment to the bank for using the credit facility.
Many people are impulsive shoppers. They do their shopping on impulse. More often than before, people are hoarding things they don’t even need. When the moment arises, there is an urge to purchase at 50% discount, buy-one-free-one offer, the second pair at 80% off, etc. The consequences? Many people get into credit card debts even though they know that they should buy only those stuff that they need. No use crying over spilt milk. There’s always a next time.
Obviously, there are ways to escape from making an impulse purchase. Some people who had experienced the bitterness of paying off their mountains debt would advise you to cut your credit card. If you have a hard time controlling your spending, physically freezing your credit card may be the smartest action you can do right now. It will give you a bang on the head. Trust me.
After years of using many credit cards myself, I think the best advice you should get is to cultivate the habit of discipline spending. Over the years, I have developed a system that works, and my spending is made primarily with credit cards whenever possible. To control your impulsive behaviour, you need a new habit to replace this destructive habit. Credit cards are just financial tools. It is not dangerous until its users become reckless.
Now, imagine the process of considering a purchase. What’s going on in your mind at that particular moment? You might be thinking:
- The discount is only for this weekend. I don’t want to miss it.
- It is the last piece! The next person who sees it is going to grab it.
- I have never seen such a deep discount before.
Well, all these are the marketing gimmicks of messing your mind with scarcity and urgency—to the point of failing to act rationally. A person who can’t control will take out his credit card. Even if he doesn’t have a card, he will withdraw cash from the nearest ATM to make that purchase.
Should you suppress your desires when you get an urge to buy? It is common sense, but it doesn’t feel right, does it? You want something, but you suppress your feeling towards it. That’s cruel.
Now you know that thought process, let’s just add one new habit into that struggle. If done right, then you shouldn’t feel guilty making a purchase, or be disappointed of forgoing the opportunity of grabbing the good deal.
The new habit I am talking about is to always ask yourself this question before buying something:
“Am I going to use it in the next three days?”
The time frame of 3 days can be any period – 24 hours, one week, etc., whatever works for you, but not too long. The process is to get your mind to stop thinking about the discount, the sales or the feeling of owning an item. Instead, you focus on the practicality. If you are not going to use the thing, it is not going to add value to you. So it is not going to make you happier by owning it now. You can come back later to buy it when you need it. The new habit will let your mind cool down.
Let me share my experience. I love to read, coupled with the RM1000 tax relief on book purchase, I would buy as many books when bookstore put up a sale. So each year I would make sure that I use up the maximum tax relief amount plus my wife’s quota. At my reading speed, I can finish only 1-2 books a month. But compared to the rate of my purchase, I often have dozens of books unread, still wrapped, occupying my limited bookshelf space.
You can imagine that just after a few years, I have close to a hundred books piled up. The trouble comes when I move to a new home. That had happened a few times. So instead of gaining knowledge and pleasure through reading, books have brought me more hassles. The things I first thought of as assets became liabilities. So I have refrained from this impulsive book hoarding many years back. I will make sure I’ve done reading the books before I get some new ones.
Be practical, be wise and make only prudent spending decisions. You can always come back after 2-3 days and buy it if you really need to. At least that way you’ll be safe from committing mistakes and be drowned in a pool of guilt. Use that cooling off time to do some research too, if the item you are eyeing would cost you a bomb.