No one plans on making impulse purchases. That’s what they are — an impulse. But it seems like every week or so I make a stupid impulse purchase that makes me wonder if I have any control over how I spend money.
My latest impulse purchase: Coffee.
It was $5 for a small bag of raspberry chocolate I saw by the checkout counter at Marshalls. Here are the reasons that ran through my head of why I should buy this wonderful sounding coffee:
- I like coffee.
- I like trying new things, including different types of coffee.
- I like raspberries.
- I love chocolate.
- Raspberries and chocolate together sound awesome.
- It’s only $5.
What makes it a stupid impulse purchase is that it was lousy coffee. And that I wasted $5.
My wife and I tried it the next morning and the lousy raspberry taste overwhelmed the chocolate so much that it wasn’t worth drinking.
I’m this close to throwing the entire package in the trash and calling it a total loss.
“But it’s only $5,” you say.
True, it wasn’t a big investment. After all, by taking that $5 risk, there’s the possibility that I’ve found a cheap and awesome coffee gold mine that I can exploit for years to come. Who buys coffee at Marshalls anyway? No one, I hope.
A cheap lesson
The point isn’t that $5 saved could be saved elsewhere. I know how compound interest works. A quick look at an online calculator shows me that saving $5 a week at 2% interest compounded monthly will grow to $2,665 in 10 years.
Yes, that could be money put into a college fund for my daughter (she already has one), or an emergency or retirement fund (ditto). Or saved it up for a night out.
I’ve written about how anyone can save more than $2,000 a year by making coffee at home instead of buying it at Starbucks or another coffee shop.
But how to turn $5 into a lifelong slush fund isn’t my point.
What gets me is that the odd impulse purchases I make — which are more regular than odd — are a waste of money. It would be less frustrating if I put a $5 bill atop the trash can every week so the garbage collector could have it. At least then it would be put to some use.
The only good news in all of this is that at least I made the dumb impulse purchase at Marshalls, a place I rarely go to because I rarely buy clothes. And when I do, I want to save money.
An impulse purchase blindspot
It also helps point out that I have a blindspot for impulse purchases. And I’m a writer who specializes in personal finance writing, so I know in my head how stores play upon a shopper’s last-second wants/desires in the checkout line.
It’s worth noting that I made my purchases at Marshalls that day with a credit card. A credit card can be the perfect tool for making an impulse purchase. It doesn’t seem like you’re spending real money.
Paying with cash seems much more real and like I’m spending money than waiting for a bill in a month.
How to stop an impulse purchase
How do I stop making impulse purchases? Up until last week, I’ve thought that I often make a conscientious decision to avoid racks of merchandise near or next to a cashier. Maybe I’m wrong. Or maybe I made impulse buys elsewhere in the store.
I try not to shop for groceries when I’m hungry, for example, which I hope stops me from buying food I don’t need.
I have two ideas for stopping future impulse purchases:
- Use only cash for small purchases.
- Recognize this blindspot and think about it every time I put something in my hand at a store.
These may not be enough to stop me from throwing money down the drain, but I hope it’s a start.