You’ve likely made an impulsive purchase in the last few months–and you’re probably not proud of it. In fact, according to Shopify, 40% to 80% of all purchases are impulse buys. When you shop online, that cute pair of shoes or purse you clicked on follows you around the internet. It seems like it’s a sign that you should get it — when actually, it’s savvy marketers doing what they do to get you to spend money. But before you can control your habits when it comes to buying stuff, let’s talk about…
It feels good to have other people acknowledge your success and wealth. Instinctively, we want to feel validated by others. People buy from luxury brands not because they have a better value proposition but to show off.
The truth is wealthy people don’t actually make many luxury purchases. It sounds irrational, but most luxury purchases are made by those who don’t have much money. There’s a difference between being wealthy and looking rich — you can find out by reading my article here.
You might feel a rush whenever you spend money on a small purchase or an Uber Eats order. That’s because spending money gives you a dopamine rush that makes you feel good. However, it’s easy to get addicted to such a rush and continue purchasing stuff to make yourself feel better when the excitement of the last thing you bought wears off. Setting a budget is one way to keep yourself from getting carried away with these purchases.
Self-care is important, but there is a fine line between taking care of your well-being and spoiling yourself. While it’s okay to spend money on yourself every once in a while, doing it too often can be addicting and will drain your finances over time. Trying to stop them altogether may be a challenge, so it’s best to try and limit these self-care purchases instead.
Maybe you’ve purchased something because you thought it would encourage you to change your lifestyle. The best example of this is a gym membership and wanting to take better care of your health. Unfortunately, many people buy gym memberships and forget to use them for most of the year. Or, they forget that just buying the membership isn’t the same as exercising.
Purchasing an expensive item alone will not create a habit, like running shoes and a smartwatch, to start running. You better see it through if you buy the best equipment to start a new project. Otherwise, you may end up with a $100 dust collector. Think before you buy, sis!
The only real investment is something that will earn you money over time, whether through savings or returns. Some purchases are only investments under certain circumstances, like a car.
Let’s say you’re a small business owner and need your car to make deliveries. In this case, the car is an investment because you’re using it to make money. You can save more money by declaring the car a business expense. This lets you call it a tax write-off.
If you’re buying a car to drive around instead of commuting or taking an Uber everywhere, it’s not an investment. Instead, it’s a purchase. You can’t even say it’s saving you money because car maintenance and gas are expensive.
Knowing the difference between an investment and a luxury purchase will help you stop justifying impulsive purchases.
Shopaholics will often find themselves buying random stuff and justifying the purchase. Here are a few things that people often buy, even if they don’t need them:
The vast majority of people don’t need a factory new car. You might find more value in purchasing a model a few years older and bundled with insurance.
In terms of gadgets, most people will get by with just a smartphone, a laptop, and some earphones. These gadgets will usually last 3-4 years, depending on the model, and even more if properly cared for. Buying new gadgets annually may be fun, but it’s an unnecessary money sink.
From a financial perspective, a lottery ticket is rarely worth it. You’re more likely to get struck by lightning than win the Powerball. Additionally, the money you use on a lottery ticket is probably better spent elsewhere. Buying other stuff, like a snack from 7-11, will probably give you more enjoyment.
Between salon visits, makeup hauls, and wardrobe changes, you need to spend money to look good. However, you don’t need to spend hundreds of dollars on these things. You can give yourself a great look while still on a budget. Check out my article to find out more.
For new parents, baby clothes are some of the biggest money traps. Kids will grow right out of them before too long. Instead of buying brand-new baby clothes, you can rely on hand-me-downs from relatives if any are still available.
Some kitchen items only have a single use. For example, a banana slicer which I can’t believe costs $10. Most of these specialty items aren’t necessary, and you can prepare perfectly good food without them.
Some items can fall under this category, but generally, they’re knick-knacks that take up space. Stuffed animals, figurines, and even books can fall under this category. While it’s nice to own them and use them as decorations, they’re not the most necessary purchase.
If you’ve downloaded a free app from the app store recently, you’ve probably been bombarded with ads. Otherwise, you’ve likely been asked to upgrade to the premium version. If you use them often, they’re fine to purchase. But you’ll probably almost always want to use that money elsewhere.
If you spend $8 every day on lunch on a 5-day workweek, you’re spending $40 a week and $160 a month. You could cut this number drastically by taking the time to prepare your own food at home. If you need cheap and easy recipes, check out my article on the cheapest meals.
Multi-millionaire and Shark Tank star Kevin O’Leary says that buying coffee from a cafe is a waste of money. While it’s definitely a bit harsh, he’s not entirely wrong. Brewing your own coffee at home is a great way to get that caffeine hit while saving money. Treating yourself to brunch at your favorite artisanal coffee shop every once in a while doesn’t hurt.
If you’ve found that you’ve been buying too much stuff, it might be time to do some cleaning up. Here’s what you can do with the things you don’t need anymore.
For clothes, clutter items, gadgets, and more, you might be better off selling them for a fraction of the price. It’s a great way to get value out of something while being able to recoup some of its price. Websites like eBay, Craigslist, and Facebook Marketplace make reselling easy.
Donating them is great if you’d rather give your items to a cause. It’ll ensure that your items are being put to good use. Your impulse buys from a few years ago that you don’t need anymore could change someone’s life.
If you’re going to donate professional clothes, you should donate to a cause like Dress for Success. That way, your clothes will go to women who can’t afford professional clothing for job interviews.
If you want to make room before buying more stuff, it’s a good idea to gift what you have. This is especially true during the Holidays. Gifting your friends an old book, article of clothing, or knick-knack could mean a lot to them.
Some items, like clothes that don’t fit right anymore, may seem worthless but can still be used. Upcycling, or creative recycling, is a great way to get additional value from your old purchases. With a bit of creativity and elbow grease, you can turn an old pair of jeans into a new jacket!
You don’t necessarily need to get rid of some things. An old phone may still be useful if something ever happens to your new one. As long as you don’t hoard all of your purchases, keeping some stuff shouldn’t be a problem.
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Dollars Makes Cents by Shaquana, Financial Coach and Wealth Expert, resources helps professional millennial women of color with the tools and skills they need to eliminate their debt, amplify their savings, and build generational wealth — without having to compromise their lifestyle.
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