Smart ways to stop impulse buying

How many hours would a CEO have to work to purchase a pair of shoes? Pricing items according to time is one way to stop impulse buying. Effie Zahos explains why and shares more tips to help curb impulse spending. 

I am a shoe girl. I can’t resist a killer heel, a kitten heel, a block heel or even a flared heel for that matter. But, while the right kind of heel can do wonders for my confidence it does very little for my bottom line.

The good thing is that I can curb most (and I stress the word most) impulse buys with one simple question: “How many hours would I have to work to buy that?”

It’s a very simple but effective strategy as it plays on the value of time – and there is nothing more precious than our time. Once you start pricing items according to your time, rather than a dollar value, you’ll be surprised at just how frugal you can be.

Let me explain. You see a stunning emerald green velvet duvet for $350. Let’s say, for argument’s sake, you earn $50 per hour (after tax). That duvet would take you almost a full day of work to pay for. Still want it?

I came across Time is Money – a Chrome browser extension that automatically converts prices online into hours of work. You simply add the extension, enter your income details and then voilá … when you’re shopping online it shows you the number of hours you’d need to work to pay for an item. I had a quick play around and, while I love the idea, it doesn’t seem to work on all websites. And, in some cases, I could only see the time and not the price which was a little confusing.

Converting prices into time is not without its disadvantages. Depending on your income, it can be downright depressing. Canstar crunched the numbers and found it took only two hours of work for a CEO to snap up a pair of Nike sneakers. A nurse, on the other hand, would have to work 8.5 hours to buy the same pair. You can see more examples in the table below.

How many hours working would it take to save enough for…

← Mobile/tablet users, scroll sideways to view full table →

Source: www.canstar.com.au – 6/12/2022. Annual income figures based on Hay’s Salary Guide FY 22/23, using the average of state/capital city values where appropriate. Annual income figures and product prices used for illustration purposes only. Hours required calculated based on the net annual income (per 2022-23 income tax rates plus Medicare levy) and 2,080 hours worked each year (8 hours per day, 5 days per week, 52 weeks per year). *Annual Income figures based on: CEO – Commercial CEO/MD (Turnover up to $50m), Electrician – Mining Fixed Plant Electrician, Teacher – Government Schools, Mechanic – Logistics Transport Mechanic, Sales Rep – Sales Executive/Rep.

The other downside of this strategy is that it can help you justify small purchases while you might choose to ignore it for big-ticket items. A $20 cocktail may only equate to 30 minutes of work, for example, so you think nothing of it even though it’s really a splurge.

On the other hand, working one month to pay for a one-week holiday may seem like it makes no financial sense but chances are you’d ignore the rule and still take the trip.

But, at the end of the day, anything that gets us to think about our purchases is a good thing.

Smart ways to stop impulse buying

If you’re looking for other ways to cut down on impulse buys consider these four tips:

Know your triggers

There is nothing wrong with acting on your emotions as long as they don’t drive your spending decisions. Understand what motivates you to spend and put in some “fixes” to prevent you from overspending.

Give every dollar a home

Just like an organised home has a place for everything so should every dollar you earn. You need to plan where you’re going to put every dollar and not just dump it in one drawer.

One option is to use the 70:20:10 formula. This means you’d divide your pay into:

• 70% for everyday living costs such as rent or home loan, utilities, food, clothing and transport.
• 20% for saving.
• 10% for splurging.

Of course, you can play around with the percentages, but the idea is to only use money in the splurge bucket for any impulse buys.

Watch out for marketing tricks

There are a number of tactics used by retailers to make us spend more. One example is paying in instalments – four payments of $99 sounds so much more affordable than one payment of $399. Being aware of the various marketing mind games can help you avoid spending more than you intend to.

Use the 48-hour rule

Sometimes the best thing you can do is nothing at all. Put a rule in place that for all impulse purchases you have to wait 48 hours. Chances are after a couple of days you may not be so keen on the purchase – but if you are, then go for it.

Here’s to understanding the value of your time.

Effie

Cover image source: Prostock-studio/Shutterstock.com