Rachel Cruze Tackles the Cause of Impulse Spending and How to Stop It for Good

It would be an exaggeration to call this phenomenon an epidemic, but it is a serious problem in our society: impulse purchases. According to Invesp, 84% of consumers have made impulse purchases, and they account for nearly 40% of all online spending.

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Why are we so prone to impulse buying? Financial guru Rachel Cruze recently got to the root of the problem and provided tips on how to kick the bad habit in a blog post on Ramsey Solutions.

Also find out how impulse buying affects Gen Z.

Impulse spending is partly a cultural problem

Before we dive into Cruze’s analysis and proposed solutions to combat impulse spending, let’s think about the word “impulse.” According to Merriam-Webster, it means “a sudden and spontaneous inclination or incitement to action usually without premeditation” and “a natural propensity or tendency usually other than rational.”

The very idea of not being rational with money is frightening. Yet many of us, regardless of our discipline, engage in impulsive behavior. It’s not just a matter of neuroscience (the frontal lobe of our brain controls executive functions, including impulses), it’s also a matter of culture. We live in a consumer society. The things we buy have meaning beyond their purpose. For example, a designer handbag or a Rolex watch can signal that we’ve achieved high status, commanding respect from others.

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Impulse spending makes us feel better – for a short time

Then there’s the emotional factor, which Cruze touched on in his blog. You’ve probably heard of “retail therapy,” the act of buying something to make yourself feel better. Impulse purchases often stem from the belief that certain things can solve your pain, even if only for a short time.

“When you’re having a bad day, does a little shopping seem like the cure?” Cruze wrote. “Maybe it’s not a big purchase. This time.”

As small or innocent as impulse purchases related to retail therapy may seem, they are inherently dangerous, as Cruze pointed out.

“Making decisions based on pure emotion is a surefire way to let impulse buying take control,” she writes.

Unfortunately, retailers know our weaknesses and exploit them.

“They will play on your emotions with their ads, hoping it will strike a chord that will prompt you to buy,” Cruze wrote.

The taboos around money that we grew up with haunt us

Another reason we buy on impulse: We may never have been taught that it’s risky. Most of us (especially older generations) grew up in a social environment where talking about money was taboo. And the stigma around discussing finances persists, even in intimate relationships. According to a 2021 study by Fidelity Investments, one in ten couples don’t know their partner’s salary.

Also, we may have had bad financial models. We cannot free ourselves from what we have been taught to believe or understand.

“How money was handled in the household you grew up in shapes the way you see things,” Cruze wrote. “But don’t just blame your past.”

We can’t change the way we were raised, but we can change the way we think about money in the future. It starts with thinking.

“Research how this affects your spending today and make changes,” Cruze wrote.

Retailers make us believe we are getting a good deal

We may also make impulse purchases because we are tempted to think we are getting a good deal, even if it is something we don’t need or, sometimes, even want.

“I totally get this thinking, because I love a good deal,” Cruze wrote. “But, guys, this is a real marketing ploy. When you think you’re getting a good deal or ‘free shipping,’ you’re much more likely to actually buy something — which is exactly what marketers want you to do.”

Break the impulse spending habit for good

Impulse spending is a financial trap and we all, regardless of our income level or net worth, need to avoid it. How can we do it? Cruze has provided 10 helpful tips that everyone should – and can – follow.

Budget. Budgeting isn’t just a way to track your spending, it’s also a way to stay on track financially. Make a list of your needs and wants and always refer to that list when temptation strikes.
Allow yourself to spend on pleasureUnless you’re in a tight financial situation, you don’t need to completely give up all your spending. Leave a little wiggle room, within reason. Build that wiggle room into your budget.
Hold on. The enemy of impulse is patience and thought. To combat impulse buying, give yourself a day or two to think about whether you need an item before you buy it, even if it’s on sale for a limited time.
Plan for it and rely on cash. Credit cards can be weapons of financial destruction. Cruze recommends using cash whenever possible, to reduce the risk of ending up with high-interest debt. She also recommends careful planning, including meal planning.
Shop when you are calm. Remember that impulse buying can be related to retail therapy. Don’t shop when you’re feeling particularly emotional.
Abandon comparative thinking. They say comparison is the enemy of joy. It can also be the enemy of wealth. Don’t let the thoughts of others control your thoughts about your needs.
Ditch social media. You don’t need to cut out social media completely, but take a break. “Try deleting Instagram and Facebook for a week (or more) and see if you notice a difference,” Cruze said.
Take on a no-spend challenge. Sometimes a little competition is just what we need, even if we’re just competing with ourselves. Cruze suggested trying a no-spend challenge. “Try this for a month,” she wrote. “It’s a great reset for everyone!”
Leave the credit cards at home. Again, prefer cash payments whenever possible.
Keep your goals in mind. Your goal is probably not to be broke and in debt. It’s to have financial freedom and security. “Help yourself by reminding yourself of the important goals you’re working toward,” Cruze wrote. And remember: The joy of an impulse purchase never lasts.

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This article was originally published on GOBankingRates.com: Rachel Cruze Tackles the Cause of Impulse Spending and How to Stop It for Good