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How is impulse buying impacting people? Why do we impulse shop? How can you kick the impulse shopping habit?
You deserve a “Treat Yo’ Self” day every now and then. Having flexibility in your budget to allow for special thrills might be an important part of your relationship with money. But what happens when flexibility becomes reliability?
It’s difficult to achieve savings goals and feel positive about your money when you let impulsive purchases disrupt your plan on a regular basis. Let’s take a look at what kind of impact impulse shopping is having on people today and how you might kick the habit.
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How is impulse buying impacting people?
In today’s constantly connected world, the majority of younger people are used to getting what they want, when they want it. That’s not a symptom of any entitlement per se, but the natural consequence of a consumer environment where we can stream movies and TV shows on demand, transfer money at the drop of a hat and gain new skills while we’re commuting.
With instant gratification the modern norm, impulse shopping is the name of the game for many millennial consumers today. The following statistics from Finder.com reveal just how much impulse buying has become an ingrained part of youth culture:
81 per cent of millennials makes impulse buys at least once a month.
69 per cent make monthly impulse purchases online specifically.
On average, the amount spent per impulse purchase is $71 online, or $82 in store.
Interestingly, almost an equal proportion of millennials tend to feel content after an impulse buy as those who regret it (46 and 48 per cent respectively), suggesting they can work well for the right people.
Is splashing your cash hurting your wallet?
Why do we impulse shop?
It’s clear that impulse buys are second nature to many Australian millennials – but beyond the culture of consumption, what drives us personally to make snap purchases? There are a few possible reasons:
Perceived savings: A global consumer survey by Mood Media found that 62 per cent of Australian shoppers across all age brackets are most influenced to make impulse purchases by discounts. We see significant savings and decide the purchase is worthwhile, even if it’s something we may not even consider buying full price.
FOMO: The fear of missing out can be crippling. A significant 55 per cent of millennials would agree, as they cited FOMO as the leading decision driver in Finder.com’s research.
Retail therapy: Owning new things can feel exciting or reinvigorating for some people. Over half of consumers have engaged in stress spending, according to a US survey by Credit Karma.
Influencers: 47 per cent of millennials say they use social media while shopping, compared to 19 per cent across all age groups, according to Deloitte. The same study shows that we are 29 per cent more likely to make a purchase when we are using social media and six times more likely to spend significantly more.
Online or offline, impulse buys can be a drain on your income.
How to kick the impulse shopping habit
We all enjoy a bit of impulse shopping now and then – but when does it get too much? If you’re finding yourself living pay check to pay check as a result of impulsive purchases, and it’s stopping you from achieving your goals, these strategies might help you beat the habit:
Wait out big purchases: The latest device might be attractive, but it’s probably expensive. Before making big purchases, allow yourself a set time period (eg. 30 days) to think about it. If you’re no longer interested once that time has passed, you’ll feel all the smarter for avoided an unnecessary purchase.
Budget for impulse buys: Maybe you find treats improve your mood when you need them to. If impulse buys are part of how money feeds into your happiness in the here and now, consider adjusting your budget to allow more room for treats while still working towards your goals.
Exercise mindfulness: Meanwhile, if you find yourself regretting impulse buys more often than not, take time to reflect on this. Before buying on impulse, ask yourself if you’re likely to resent the decision later.
Remember your goals: Lastly, don’t lose sight of what matters to you most. The enjoyment you get from your purchases may pale in comparison to the feeling of achieving your goals – whether that means owning a home, paying off debt or travelling the world.
It’s not a bad thing to buy until it stops you from living your best life. Reach out to Invest Blue today to start a conversation about your relationship with money.
What you need to know
This information is provided by Invest Blue Pty Ltd (ABN 91 100 874 744). The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regards to those matters and seek personal financial, tax and/or legal advice prior to acting on this information. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relations to products and services provided to you.
