We have all, at one time or the other, been guilty of impulse buying; especially during the festive seasons. Impulse buying is all about buying something due to sudden urge, without an actual reason, and without any prior planning. When it comes to such expenses, emotions and feelings have been found to play a major role; emotions that can be triggered by different factors like a well-crafted ad campaign. In reality, these purchases can be anything from small expenditures like chocolates and clothes to larger expenditures like cars or jewellery. Up to 80% of the times, impulse buying is followed by a feeling of disapproval and guilt, and is accompanied by the very real chance of financial discord and damaging your credit score.
How Impulse Buying Can Disrupt Your Financial Goals
The most harmful aspect of impulse buying, apart from the immediate financial deficit, is that it can bring down your credit score. A credit score is used by lenders and financial institutions to judge your eligibility for a line of credit. The credit score paints a picture of your credit risk and plays a major role in deciding the rate of interest you might be offered in the future.
Experts agree that the sheer number of credit cards that are easily available to the populace is what contributes in a major part in impulse buying. The thought of “Buy Now, Pay Later” tends to do much more harm compared to the ease it provides. Add to this a general lack of financial literacy and knowledge of compounding interests applicable on credit cards, and you have a ton of people who do not realize they are damaging their credit scores till it is too late.
Tips to Avoid Impulse Buying This Holi
As mentioned before, festive seasons have a history of seeing a surge in impulse buying. Holi too has been associated with buying new wares, which adds to the spendthrift feeling, and people end up overspending. To help counteract the same, here are a few tips which can help you avoid the urge of buying random stuff:
Don’t Quit Cold Turkey
As the name itself suggests, this type of purchasing is built on an impulse. If you suddenly quit buying stuff completely, you will definitely reach a breaking point; and head out for a spree, in which case you will end up spending even more than before.
Make a Game Plan
Shopping cannot be stopped altogether. If you don’t consider impulse buying, there are still a number of items that you need to buy. Make a plan, enlist the necessary items, and stick to it when you shop.
Allot a Time Period
If you have an urge to buy something expensive that you believe you really need, give yourself a week. If after a week you still feel that what you wanted to buy was important, go buy it; because an impulse generally wears off after a while.
Work Out the Value
If you want to convince yourself that you don’t need to buy something, calculate its price in terms of the hours or days that you will have to work to be able to pay for it. Buy it if you think that amount of effort is a fair exchange.
Like many festivals, impulse buying comes to the fore around Holi as well. As a preliminary fail-safe, factor in your future financial goals into the equation before making any major expenses; a little bit of control can go a long way to help avoid impulse buying.
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