Don’t end up with a fist full of nothing.
Impulse buys are a common enemy of people who try to save money but just can’t seem to stop the aimless purchase here and there. Many personal finance experts would have you believe that any impulse buy is terrible but that isn’t always the case. Let’s learn about the culprits and what to make of them.
A good impulse buy is a low-cost, high-reward purchase. For example, taking the occasional trip to the movie theater, buying coffee when you’re rushed in the morning or treating yourself to a candy bar in the checkout line. Just make sure to set your limit on these smaller purchases; too many can add up!
Bad impulse purchases are fairly expensive items in the $50-100 range. These purchases may give you happiness at first but have no long-term value. They’re often completely unnecessary. Think of Blu-rays – there are so many ways to work around that $25 purchase. Think Netflix, Redbox or even a $5 purchase on-demand. If the item you’re considering wasn’t part of your trip, give it careful thought and try to resist the urge.
Don’t do this. Purchases over $100 that serve almost no purpose in your life are detrimental to your savings. Do you really need that ping pong table? Remote control helicopter? Deluxe popcorn popper? You will hardly ever use ‘ugly’ purchases. If you’re debating whether to get a random, expensive item for over 5 minutes, it’s best to leave it. In the end, you are buying these products just for the thrill of the buy.
Now you are familiar with the cast of characters. Take some time to sort through your own expenses and pay attention to your purchases throughout the week. Try to categorize your unplanned purchases into one of the good, bad or ugly categories. It will make a difference!