We all know that we need to save, but sometimes, we get in a dilemma of deciding whether or not to buy a certain item. For example, you might be thinking of buying a new TV, but it’s quite expensive. Your brain is telling you not to buy because there’s internet anyway, but your heart is telling you to buy because watching on a bigger screen is so so much better (and more comfortable). So, how do you mentally deal with impulse buying, and when should you let yourself buy?
7 Tips on How to Mentally Deal with Impulse Buying
Set savings goals
Always remind yourself why you need to save. It can be to get out of debt, kids’ education or retirement. If there is anything else that you want to buy out of your savings, find some way on how you can get it. You can look for pre-loved items, recycle shops, or get another source of income in order to afford it. If you are not willing to hustle, then you probably don’t need it anyway.
Compute work time you need to pay for it
This means computing how many hours you need to work to pay for the item. For example, you want to buy the latest tv model that costs around $500. If you are earning $25 per hour, then you need to work extra 20 hours or 2.5 days in order to pay for it. It doesn’t look appealing anymore, isn’t it? You can then think if buying that TV is totally worth it.
You can invest that $500 instead in paper assets and maybe get an average return of 7% per year. You can enjoy the proceeds and buy what you want later without spending the initial $500.
Compare with other things you could buy
This means think what you can buy or pay with that amount. For example, the $500 can pay your internet instead for 8 months. If you compare the two, you might rather have the internet connection than the latest TV model. Or you can use it to buy your 2 weeks worth of groceries or some needed clothes.
Budget money in advance
You can actually set aside money for your “wants” as well, not only for your needs. Include this item in your budget so you won’t feel bad if you purchase it. If you budget in advance, the itch to buy this item might go away later on and you can use this budget on other wanted items.
You can also have savings goal every month and after you have met your goal, you can use the extra money that you have to purchase what you want.
Or in reverse, you can remove some items in your budget to give space for your wanted purchase. For example, you have budgeted for a travel. You can erase this off and replace it with your desired item.
Estimate how long the item will last and how much it will improve your life
This can also apply to semi-large purchases like cars. For some people, commuting is fine. But for some, commuting makes them more tired. If you are like the latter, you might think of buying a car instead to help you feel more comfortable.
Buying a car can be expensive, but if it’s more beneficial for you and makes you less stressed (and you can pay the loan), then it will be justifiable for you to get one. If a new car is too expensive, you can get a second hand instead. If you don’t get stressed with commute at all then there’s no need to buy one. It all depends on how you weigh the pros and cons of the item, and whether it can improve your life or no change at all.
Think how long it could postpone your retirement
If your goal is to retire earlier, think how much the cost will push your retirement back, and if the purchase would make you happier that it’s totally worth it.
For example you are thinking of buying a house. A house costs quite a lot and would also push back your retirement and add on your monthly costs. If the thought of that makes you stressed, then there’s no need to buy a house.
If you are thinking of buying an old car vs a new car, or model A vs model B, sometimes rather than the cost of the item, you also have to consider whether you would be happy with your purchase. If you opted for a lower cost item (an unwanted model), but you really don’t like to drive it, then it will just end up not being used or taken care of and will cost you a lot more in the long run.
That being said, it doesn’t mean you have to buy pricey items just because you will be happy, you still need to consider if you would be able to pay for it. Go for the right balance between cost and preference then consider your options well.
Pause and find a distraction
Most often what we just need is to distract ourselves from the purchase we are thinking of. Find yourself a distraction first, like maybe hang out with your friends, surf online, or watch Netflix. After a while, the urge to buy will pass away and you have already change your mind by then.
So these are the 7 tips on how to mentally deal with impulse buying. In the end, it still depends on what is a necessity for you, and what can make you happy. Others are happy with living the basic life (no car, no house), while for others a car is a necessity for them to get to work. Just be sure that for whatever decision you make, you are happy with it, you will still be able to save and you can manage the payments.
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