As an author and personal development coach for several years, one of the things that surprises me about people is the fact that the concept of budget does not exist on their do-list.
As a result of this, impulse buying has become a pattern among many people, especially people in formal employment who have a regular stream of income. It is because of impulse buying that you will crawl your way to the next salary period.
The crazy thing about this occurrence is its recurring nature. It’s as if you don’t learn from your experiences. Month after month, you complain about salary not seeing you through to the end of the month.
Impulse buying is a demon that must be exorcised with a set of practices and disciplines. Here are three of them:
1. Separate your needs from your wants.
One of the lessons I remember from my first year Economics at University of Ghana was the distinction between wants and needs. Wants are things we desire to have but can do without. Needs are things we require and cannot do without. I have observed that many times, people buy things without pausing to consider what they’ll use them for.
Before you decide to buy anything, you have to take a bit of time to consider whether it’s a need or a want. If it’s a want, you may have to hold on until it becomes a need. If it’s a need, then you may go ahead to buy it; but even that, you have to plan how and when to buy it.
2. Have a budget and stick to it.
You don’t have to buy something simply because it came up. You must plan your purchases. Impulse buying thrives mostly because people don’t plan their expenses. Impulse buying occurs when you buy an item as a result of a sudden strong desire to do so. In most cases, this item would not have been on your to-buy list. Neither would it have been on your needs list. The purchases are made based on whims and caprices.
One way out of impulsive buying is to always have a budget, especially if you have a regular income cycle. Plan your expenditure within the size of your income. The plan for your expenses should cover your tithe (10% of your income which you invest into the church, if you are a Christian or any social cause if you are not). You must also plan to save and invest a bit of it for your future, and plan for obligations such as utility, rent, food, education and so on. You may also want to plan for entertainment too.
The objective is to keep your expenses under control. It also helps ensure that only things that really matter to you get to have your money spent on.
3. Don’t carry excess cash on you.
One of the causes of impulse buying is when you keep excessive cash on you; cash which is far more than items you have budgeted to spend on. So if you are stepping out of your home to the market to purchase an item worth $100, you may be tempted to take extra cash under the pretext of eventualities. Most often, there is no eventuality but while at the market they see something else and they are moved to buy it only to get home to realize that they have no use for that item. There was no eventuality and money is gone.
Money in your bank account has a longer span to run out than money in your pocket. Learn to keep money away in your account and withdraw only when you need it to purchase an item on your budget.
In my own life and in the life of many people I coach and observe, I have realised that impulse buying is the greatest threat to financial independence. It is as dangerous as inflation is. While inflation eats away the intrinsic value of your money, impulse buying chops off both the nominal and intrinsic value.
Don’t buy when you don’t mean to buy. Don’t spend if you have not planned it. Buy only if it’s a need.
Terry Mante is a Life Coach, Motivational Speaker and CEO of Personal Development Network. He is an author with five books published already. His write-ups feature prominently in the Business and Financial Times and The General Telegraph every week.
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