By Andrew Housser
From the malls to the big box stores to online retailers that lurk just a few computer clicks away, it's easy to make impulse purchases. The problem is that for many people, picking up one or two items all too quickly spirals into a pattern of excess spending. That pattern can become a mountain of debt that is extremely difficult to eliminate.
If you recognize your own behavior in that description, it is time to get a handle on spending. People can take many different approaches to avoid purchasing beyond their means. Adopt the ones that sound like they might work for you, and you too can learn to build a healthier approach to shopping and see that credit card balance drop.
1) Wait a few minutes
Even for minor purchases, ask yourself if you really need the item and if you will get long-term enjoyment from it. Tell yourself, "If I still want this in five minutes, I'll come back and get it." Be cautious about holding an item: Studies have shown that when people hold an object for longer than a few seconds, they become willing to pay more for it.
2) Write it down
When you think, "I should buy that," instead write the purchase down on a list you carry in your wallet. Check the list a week later to see if you still want or need the item. For significant purchases -- which, for some people, will be $200; for others, $20 -- wait up to a month. Many times, you will find another solution or discover you do not need the item.
3) Pay in cash
Paying in cash limits spending in two ways. For one thing, most people do not carry large amounts of cash, which naturally limits purchases. For another, researchers have found that people who purchase with a credit card are willing to spend more, because credit cards delay the "pain" of paying.
4) Shop with a list
Be intentional when you run errands. Make a detailed list for each stop on your agenda, and buy only what is on the list. Avoid even looking at other items. As a bonus, shopping trips will take less time and be less stressful -- with no guilt or letdown when you carry your packages into your house.
5) Try HALT
Some recovery programs use the acronym HALT -- Hungry, Angry, Lonely, Tired. Often, people make purchases to try to escape these emotions. Before you go shopping, ask yourself if any of these conditions apply to you. If you answer "yes," help yourself another way. Have a snack, call a friend, go for a walk or take a 10-minute nap to refresh yourself. Drinking a cup of tea is far healthier, and more budget-friendly, than making impulse buys that will feel good in the moment -- but cost you for a long time.
6) Challenge yourself to bargain hunt
If you are considering a fairly common item, ask yourself if you could find it for a great value online, via eBay, at a thrift store, or at a yard or estate sale. Finding a gently used version could save you 90 percent of the original retail price.
7) Take along a supportive friend
Shop with someone who is more frugal than you are, or at least who will help you realistically judge your purchases.
8) Learn from your mistakes
Before shopping for clothing, look through your closet. You might find garments you had forgotten about -- or pieces that were impulse buys that you have never worn or otherwise regretted. Remember these mistakes before you repeat them.
9) Do not let promotions sway you
Some stores offer special deals like "buy one, get one free," 10 items for $10, or buy one, get one for 99 cents. Stores promote specials to create a sense of urgency in customers. Again, before purchasing, compare these sale prices with other prices that are available. Sometimes, you might even find the "sale" price is higher than the retail price elsewhere. If the value is not good, pass it by.
10) Just say no
It is never too late to change your mind. If you realize at the checkout counter or in the parking lot that you made a purchase you should not have made, say no to that purchase. Ask the cashier to take it off your purchase, or go back inside and return the item immediately. Don't be embarrassed -- chalk it up to a valuable learning experience.
Remember, stores are in business to make money. Retailers work on your emotions to encourage you to buy, and often to buy too much. But purchasing too much or buying things you do not need will create a pattern of overspending and debt that will cause you more pain in the long run. Break this bad habit to free yourself from irrational purchases -- and save yourself from unnecessary debt.
Be intentional when you run errands. Make a detailed list for each stop on your agenda, and buy only what is on the list. (©iStockphoto.com)
Andrew Housser is a co-founder and CEO of Bills.com, a free one-stop online portal where consumers can educate themselves about personal finance issues and compare financial products and services. He also is co-CEO of Freedom Financial Network, LLC providing comprehensive consumer credit advocacy and debt relief services. Housser holds a Master of Business Administration degree from Stanford University and Bachelor of Arts degree from Dartmouth College.
