- Personal Finance
How Impulse Buying Can Save You Money
Impulse Buy at a Garage Sale
Impulse Buying: Buy Now or Pay More Later!
Deciding to buy something on the spot that you were not planning to buy is known as impulse buying. Sometimes you are faced with a situation in which you need to decide quickly whether to buy something or not. Some examples:
- A store has one of an item left on clearance…
- An eBay auction is ending soon…
- A used item is for sale and you may not see another one like it anytime soon…
- You spot a bargain on craigslist…
- There is a bargain at a garage sale and other people are looking at it too…
Should you buy it? Most advice indicates that impulse buying is bad. Things purchased on impulse tend to be things you don't really need or things you may regret buying later because you haven't thought through all of the implications.
But there are opportunities where you can get a great deal if you move quickly to make a buying decision. If you can get something you need at a better price, why not take advantage of the opportunity?
Here are some steps to guide your though process to reach the best answer to the question: To buy or not to buy? It is a good idea to think through this before you are in a situation where you need to make a quick decision whether to buy or not to buy.
Can you afford it?
Affordability is one of the biggest pitfalls of impulse buying. If you can’t afford it, it’s not a good deal. Even if you get a great price, if you can’t make the payments, you would be better off without it. For example you might have a chance to buy a used motorhome for a great price, but if you can't afford to go anywhere after you spend all of your money buying it, you may regret your purchase. If you can’t afford it, the decision whether to buy or not should be easy.
Impulse Buy at the Car Dealer
Do you need it?
I spent some time searching for a new winter coat. My zipper failed at the start of the winter season- the worst time to buy a coat, so I waited. I have one now that I bought on sale in July, but I am still programmed to search for winter coats at every opportunity. I keep finding really nice coats for great prices. Sometimes I even think I should get one as a back-up coat, but I don’t really need another coat. It’s hard to pass up impulse buying at a great price, but if you don’t need the item it would be a waste to buy it.
Would it generate expenses?
Buying a pet on impulse is a great example of generating unintended future expenses. Let's say you see a puppy for sale for $100. That doesn't sound like much money. But the puppy needs to eat every day and will need shots and care for 10 years or more. That is a huge expense over time. Once you get the puppy, there is no good way out of these expenses. The time to consider the long term costs is before you buy… Vehicles also have on-going expenses such as maintenance and insurance. Think twice about an impulsive vehicle purchase.
Do you have a place to put it?
You see a pool table for sale cheap on craigslist. Sounds like a bargain, but do you have room for it? If it takes up your entire living room and you have to pay to put your couch in storage and end up looking for a bigger house, it may not be a good deal after all…
Would you really use it?
I think people run into this problem a lot with exercise equipment. People want to exercise more, and have good intentions when they purchase exercise equipment, but it often ends up used as a clothes rack in the corner. Think carefully about how much you would actually use the item. If you would rarely or never use it, you might be better off without it.
Impulse Buying: Consumer Electronics
Is it safe?
A motorcycle sounds fun. You might even convince yourself that you could save some gas money. But is it worth the risk? If a deer jumps out in front of you at highway speed, you might wish you had passed on the purchase. Even sporting goods like rollerblades and skateboards have injury potential. Consider whether you will need to buy safety equipment such as helmets, knee pads, gloves, etc. to go along with your purchase. Do you still want to buy it after considering safety?
Will you have another chance to buy it?
Sometimes a once-in-a-lifetime bargain does come along. My wife found a carpet steamer on clearance for about $30. It had been on clearance already for $60 and had just been marked down 50% more. She had to make a quick decision since there was only one and it wouldn’t last long. She was thinking about getting a carpet steamer anyway, so she bought it. It turned out to be a high-end model and has worked great. The price was probably about $100 less than a full price unit of this quality. This was a great buy, and we’ll probably never see another deal like this. Way to shop! This is an example of impulse buying as a good opportunity to get a bargain and save money.
To buy or not to buy...
What do you have to lose with impulse buying?
Let’s say you buy the item and it turns out you don’t really want it- how much are you out? If the item is not very expensive, there is not much risk to go ahead and buy it if you are really having trouble deciding.
In some cases, there is no risk at all- you can keep the receipt and return the item later if you change your mind. Some items cannot be returned if you open them, such as movies or computer software. Other items may have a restocking fee if you return them such as cameras or computers. The return policy can be a key factor in deciding whether to buy or not to buy.
To Buy or Not to Buy
In summary, you may find a unique opportunity to buy something and save money- but should you do it? If you can take a moment to think through some of the fundamentals of making a buying decision quickly, you might be able to get a great deal on something you will be happy you bought. Think through whether you can afford the purchase, whether you would really use the item, how long it will last etc. You might find that sometimes an impulse purchase is a good move.
© 2013 Dr Penny Pincher