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How impulse purchases derail Aussie savings

Tags Financial Planning
Category Personal Finance Save

How impulse purchases derail Aussie savings

The temptation to make impulse purchases and dig into your savings is stronger than ever for Australian consumers. It now even affects those who never visit retail outlets in person.

It used to be that the only impulse-purchase resilience you needed was at supermarket checkouts as you braced for an onslaught of lollies, chewing gum, trashy mags or toy cars for the kids.

These days, the temptation to make impulse purchases lives at the bottom of your pocket or handbag. Smartphones and digital media mean the cyber world is at your fingertips as more people go online for one-click shopping.

2013 has been tipped as the year that mobile devices will have the greatest impact on the internet. IT research firm Gartner has predicted mobile app downloads will top 81 billion in 2013, an increase of 45 per cent from 2012. Australians are expected to contribute more than $37 billion to online spending.

So with modern shopping favouring these impulse purchases and constantly working against your cash reserves, it makes sense to allow your savings account some grace time before you dip in.

Time to think means better decisions

Set yourself time periods prior to withdrawing your money. Even though purchases are getting easier, avoid the temptations that come with instant access to your funds.

Imagine starting a 30-day ticking clock before any impulse buying. It would give you time to decide whether the purchase is even necessary, let you shop around for a better deal and possibly earn you more interest while you wait.

Where impulse purchases are more likely

Easy access to your money gives you more incentive to spend your savings. Simply having a credit card linked to music stores, e-books and other payment gateways means purchases can be made with one click.

How to avoid impulse purchases

Don’t store your credit card or bank information on online shopping sites. If you actually have to dig that information out of your wallet each time you buy something, the few minutes it takes could be all the time a savings account needs to avoid a sudden pilfering.

The more buffer zones you can create between your savings and your spending, the better off you will be.

Wish lists as a long-term test

Wish lists in online shopping carts are one way of ensuring purchases stay just shy of the add-to-cart button. Use them on your favourite impulse-buying websites and the next time you are tempted your account will reveal the things you almost bought last time. Are they still relevant? If not, forget them and start the process again.

For those who often fall victim to impulse purchases, look for any bank offers that might put a barrier between these actions. This could include online accounts, accounts without credit or debit cards and more.

It’s why people often take the scissors to their faithful plastic. When it starts to affect your long-term savings situation, the impulse buy is not all it’s cracked up to be.

[Sources]

http://www.rmit.edu.au/