Here’s a sobering reality: the entire retail industry is geared to get you excited about things you want, but don’t really need. We’re not just talking about those chocolate bars at the checkout grocers know you’ll grab on a whim; Canadians are spending $3,720 a year on impulse purchases, according to the BMO Psychology of Spending report — stuff they don’t always want later on.
Why Wants Will Cost You – Big Time
The 2012 report from BMO Financial Group found that Canadians spent an average of $310 a month on clothing, dining out, shoes, books and magazines, movies and music and technology that they wanted (at least at the time), but did not need or were able to afford.
Guys are worse about this than women: men spent an average of $414 a month on wants.
As many as 52 per cent regret these purchases later and 43 per cent say they sometimes spend more in a month than they make. Many bought things to cheer themselves up (60 per cent) and because it was on sale (55 per cent).
Spending Money You Don’t Have
The survey also found that 31 per cent of Canadians had to borrow money to pay for their impulse buys and 23 per cent said they were unable to get something they truly needed because of overspending on wants.
Zap Impulse Spending
If you find yourself splurging on more than you can truly afford, here are some ways to pull yourself away from the cash register:
• Wait. Really ponder if you need those new boots or if the family needs to go out for dinner tonight. Take an hour to think about it before pulling out that credit card.
• Spend what you have. Speaking of credit cards, if impulse buying is a real problem, consider doing all your spending with cash or using debit so you can never spend more than you have.
• Tuck money away. Keep a separate savings account (you can find a list of competitive rate accounts here) and create automatic transfers every month to be sure you’ve got money saved for your real needs. Tap into that account only when you need to replace your winter coat or do an urgent car repair.
• Shop at home. Before you head out to purchase new things or indulge in a nice meal, ponder the stuff you already have. Dig into the back of your closet for that great sweater you bought last year. See if you can’t make a gourmet meal with what you have in the fridge (and the help of an online recipe search). See which things you can repair around the house instead of buying a new replacement.
• Ignore the hype. Online sales. Commercials that tout a high lifestyle. Question the marketing you’re exposed to and ponder how you can find meaning in your life beyond your purchases.