VOL. 128 | NO. 233 | Thursday, November 28, 2013
Rays of Wisdom
Dana and Ray Brandon
Impulse Buying Can Come at a High Price
By Ray and Dana Brandon
Ray’s Take There’s a billion-dollar reason the racks of magazines, candy, and soft drinks are right by the checkout counters and at check-out on many a website. It’s called impulse buying, and it’s as bad for your budget as those candy bars are for your waistline.
There are marketing geniuses throughout the retail industry. Their only job is to make impulse buying irresistible, at your expense. Take that candy bar, for example. Just a few feet away in the supermarket, you can buy a package of those same candy bars at a much lower cost-per-item. However, when you’re standing in line waiting, it’s harder to resist that higher-priced and right-in-front-of-you treat.
That’s why you should consider the cost of everything – not just big-ticket items like housing and transportation. Think about that morning coffee you buy on the way to work. If it’s $3 a cup, that’s $15 a week, $750 a year (subtracting vacation and weekends). It all adds up. This is not to say that all “impulse” buying is inherently bad. If you have a plan to reach your important goals and you are on track, “treats” can be fun and rewarding.
There’s an old saying “Watch the pennies and the dollars will take care of themselves.” While that’s not exactly true – your saved dollars need to be invested and watched over wisely – it isn’t a bad policy to follow.
Every habit, every expenditure – no matter how innocuous – has an impact on your budget, your savings, and your future. Every purchase comes with two price tags – the price out-of-pocket you pay today and price to your financial security you pay in the future.
Dana’s Take Impulse buying brings other costs along with the financial ones – regret and guilt, not just for the wasted money but also the time. That solid rationalization you used to justify an impulse purchase in the excitement of the moment of purchase doesn’t seem nearly as strong when you get home and realize that you neither needed nor really even wanted your impulse buy. Then, you spend double the time and gas by driving back to return all the impulse purchases. Talk about buyer’s remorse.
The easiest way to reduce impulse buying is not to browse, and that includes online as well as in stores. Don’t make shopping – even so-called window shopping – a recreation activity. Be purposeful in your purchases.
After years of buying clothes that don’t work, I’m admitting defeat and hiring a wardrobe consultant. I’m hoping she will save me lots of time and frustration and maybe even some money in the long run.
Here’s one thing to keep in mind: one often regrets impulse purchases, but one seldom mourns over the purchases walked away from.
Ray Brandon is a certified financial planner and CEO of Brandon Financial Planning (www.brandonplanning.com). His wife, Dana, has a bachelor’s degree in finance and is a licensed clinical social worker. Contact Ray Brandon at email@example.com.