Impulsive buying or buying on an impulse can be problem most people fail to recognize. Impulse means inner feeling, when you allow that voice inside to dictate what you want to do. Impulse buying can rid you of a fortune. Purchasing items without thinking about them is called impulse buying. This is especially true when you in a super market or a super store where there is so much variety available that you just pick things up and drop them in your shopping basket.
Everyone is bound to make an impulse buy on at least one occasion in their life. When impulsive buying comes in, budgeting and financial management can go out of the window. On the face of it impulse buying may be restricted to small items such as pens, gums, t-shirts, etc. but in the long run, they can hurt you heavily.
It’s the Little Things that add up
Little droplets of water make an Ocean. The same is the case with impulse purchases. You go to a shop to buy medicines worth $200 and you have $300 with you. As you go through the pharmacy and look for the medicines you were planning to purchase, you stumble upon gums, tooth brushes and toothpastes and you pick them on an impulse and chug them in your shopping basket. At the counter when you are purchasing the medicines you had come to purchase your bill is $275 instead of the original $200 that the medicines should have cost.
This is impulse buying. Now consider doing that each time you go out to buy grocery or appliances etc. will it or won’t it hurt your financial situation in the long run? Impulse buys are unplanned purchases; these are the kind of costs that aren’t accounted for. When you plan a budget at the start of the month, you place money for everything. There is also a little savings/rainy day amount that is supposed to be saved up and used in times of financial need.
Impulsive buys eat up on your rainy day and savings amount, in the process, depleting the resources that you had saved up in case of a financial problem.
Tips to Avoid Impulse Buying
Yes impulse buying is bad, yes it should be curtailed and eliminated from your shopping but how exactly should you go about it? Here are a few tips to help you eradicate impulse buying:
- Have a five day rule before you purchase anything. If you think you want to buy something, wait 5 days before actually going to buy it. These five days will give you time to reflect on the prospective purchase and whether or not it is worth the hassle.
- Make a List and follow it. Have a tunnel vision only see thing you have gone to the shop to buy and nothing else.
- Always keep the end goal in mind. Set a financial goal and keep it in your mind when shopping. This way you’ll be able to restrict impulse buying.
You have an amazing life. Your job is sufficient. You have more than you need. You are nearing your financial goals.
Does the above remind you of yourself? Are you certain that you are financially stable? Think again!
Imagine something big comes up. A doctor announces that your wife needs a surgery or your car breaks down and requires fixing, or in the worst-case scenario, you lose your job! That job was your only source of income and now your life is not that amazing anymore.
However, there is a simple way to prevent that from happening. All you have to do is start building an emergency fund!
Tips on Building an Emergency Fund
Let us help you in figuring out how to build an emergency fund by following the simple tips below:
While saving money is difficult, especially when you are on a tight budget, it is not completely impossible. The trick is to go slow and work on your emergency fund with consistent savings in small amounts rather than putting chunks of money in, at any one time, as savings. This will help in growing your emergency fund steadily.
Below are some amazing strategies to assist you in getting started:
- Set up an automatic deduction system on your paychecks. For example, $25 can be deducted from your weekly paycheck and it is deposited in your savings account. This way, you will have a saving of $1000 in about a year’s time.
- Using your tax refunds and work bonuses as savings is a very effective way to strengthen your emergency fund in a very short time. The average tax refund according to IRS for the year 2015 was around $2,900. If you even put aside half of it as savings, it will develop your financial savings quickly.
- Try to save as much money as possible by cutting extra expenses on a monthly basis. Put these savings in your emergency fund.
- Control your regular expenses. For example, look for a cell phone plan with lower costs. Add the saved money to the emergency fund, even if it is a small sum. Similarly, you can increase your car insurance deductible and use the savings to build your emergency funds.
- Use a savings account for your savings as it can allow you to withdraw your money whenever you need it. Putting it into stocks or other investments is risky as there is always a chance of losing it.
- Always hold on to the change. No matter how insignificant you think that coin is, keep it. With every dime you save, the balance will grow and soon you will have a dependable savings account.
- A great way to save money is through restructuring your mortgages. Try finding a cheaper mortgage and the savings you make from it can go to the emergency fund.
- Play safe and never use all your savings for a vacation, simply on a hunch. It is better to plan and live well in the long term, than to live in the moment and be miserable for the rest of the year.
You can earn travel related rewards and points for using your credit cards when you travel. These extra points or miles is precisely what makes so many people get additional credit cards in hopes of maximizing the points.
There are three options that come with this.
- Fixed points
- Transferable points
- Co branded cards
Fixed value points are the simplest out of the three. The best thing about them is that you always know what you can get. There are zero surprises when it comes to using these points. On top of this, you earn points on all flights that you book, which is what helps maintain the elite status.
Transferable points are what you avail rewards from various alliances and partners. Airline rewards are usually not attached to the amount that you pay on a ticket. If you know how to work with the system, you can easily avail what would have been expensive travel tickets for a low quantity of miles.
Co branded cards do not have the flexibility to be transferred to alliances and partners like transferable points. Co branded cards are the ones that usually get you benefits on free checked bags, lounge access, elite miles, etc.
Different Ways to Accumulate Miles
Using credit cards is not the only way one can gather airline miles. You can accumulate these points by doing things like shopping, eating out, etc. Most people do not fly that often, but they do save up on some pretty impressive rewards which they avail for a vacation, for instance. Here are some of the different ways you can gather these miles that do not involve you boarding a plane.
- You can earn points on availing dining programs that are airline specific. The points you earn spending your money here is to promote the utility and consumer base of such programs.
- Use airlines that have bonus options so that you can use their programs as portals to sites like Best Buy or Target. There is a proper list of such bonuses online.
- You might want to research on different financial institutions and the perks they offer. For example, banks will provide customers miles just for opening a new account with them. Fidelity is one such organization to award you with these if you invest with them.
- Most people do not know that you can even earn miles for filling out feedback forms and participating in surveys online. Emiles is the best example of this. To stack on some extra points, just answer a few questions.
Which Credit Card Should You Pick For Most Rewards
The best way to pick a credit card is not by the rewards it offers but by what you need it for. A card that doesn’t help you with your spending but gets you great points is not exactly a very beneficial credit card.…