Being present and knowing when a situation is triggering you is important. You have fewer disagreements or quarrels with your loved ones when you’re present because you think before you speak. You eat less because you eat when you’re hungry, and you buy less because it doesn’t make you feel better. Buying something will not determine your self-worth, and that’s essential, meaning you’re worthy regardless of whether you have a diamond ring on or not.
And I want you to get there. The first step is to incorporate practices that allow you to quiet your mind to build a rich inner life where you love yourself regardless of stuff out there.
Transcript: Wealth Inside and Out® Podcast – Avoiding Impulse Buys with the 3 Day Rule
Hi, my name is Annette Bau (bah oo), your Wealth Inside and Out® Podcast host. I’m a Certified Financial Planner™ and founder of The Millionaire Insider®.
For over 30 years, I have been advising and researching the top 1% of millionaires.
I am passionately obsessed with money, mindset, the intersection of self-worth and net worth, and how the two connect and allow us to live fulfilled and wealthy lives on our terms.
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Most people want enough money saved to have peace of mind and financial freedom but succumb to impulse buys that deplete their savings.
And often, unplanned purchases wreak havoc on our well-intended plans for long-term financial security and retirement. Many people with impulse-buying issues have money and are doing well… for now.
They don’t realize that impulse buys wreak havoc on their finances over time when they can’t or don’t work.
It actually will turn your golden years into a nightmare.
I have seen it repeatedly, even with people who get windfalls like sudden wealth. People who had a very controlling spouse, and now the spouse has passed, or they’ve divorced. Now, they are in control of money, or they have the money. It can be a nightmare.
I have literally seen people blow through money like little kids in a candy store. So what I want you to think about real quickly is when was the last time you had an impulse buy? And I was thinking about this, and interestingly, I can remember when I was pregnant with my older son. So, this was a long time ago, but we were in the Caribbean islands, and I felt so miserable.
I remember I must have bought like five pieces of jewelry. And I needed more jewelry like I needed a hole in my head.
I was impulse buying. I was trying to avoid the fact that I felt so miserable because I shouldn’t even have been on a cruise being pregnant. My doctor said I’d be fine. Well, I did not feel okay.
But the point is that if you want insight into impulse buying, which we all do, and how to curb the habit, especially when it’s potentially causing problems for your long-term security, you’ll love today’s episode.
So, let’s dive into
Avoiding Impulse Buys with the 3 Day Rule
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Today, you’re going to learn:
- What is an impulse buy
- Understanding impulse buying
- What causes an impulse buy
- Consequences of impulse buying
- How to avoid impulse buying with a three-day rule.
What is an Impulse Buy?
Let’s start by reviewing what an impulse buy is so we’re all on the same page. It’s when you buy something spontaneously. And it includes unplanned purchases made on the spur of the moment.
Because it’s often a spontaneous decision, it can be simple. For instance, buying a candy bar while in the checkout line at the grocery store, even though you really know you shouldn’t.
And before you know it, you’ve eaten it. You ask yourself why did I do that? Because it’s right in front of you. You do it without thinking about it.
Often, impulse buys are very unconscious. For example, it can be making a purchase of an expensive handbag that you saw an influencer share on their social media feed. There are a lot of different types of impulse buys.
Now, I personally find with many people that smaller impulse buys can be worse than larger ones. It’s generally not that you had this major impulse to buy something. Typically, you give it some thought, especially if it’s a significant purchase.
Often, you consult with your partner if you have one. You also typically think about larger purchases, whereas when it’s not super expensive, that’s often not the case. And it’s interesting because where I work out, one of the women that works out there actually worked at Nordstrom’s for years. One day, we were talking because another woman asked about this purse, which cost about $10,000.
Real-World “Must Have Purchases”
She said it was so interesting because she would have people come in and just be shopping and suddenly see it and have to have it. They would have to use four or five credit cards to be able to pay for it.
How horrible is that? Now, $2000 to $10,000 is not ideal. When you start getting into some of those higher numbers, that can be a problem if it’s habitual.
That said, when people are making significant purchases, like buying a car or a house or something along those lines or taking an expensive trip, they’re giving some thought to it and considering their money with it. A lot of times, people are using their prefrontal cortex as compared to what typically happens with an impulse buy. With an impulse buy, their out-of-control primal limbic brain says, “I want it and have got to have it.” The next thing you know, they’re buying it.
Impact of Impulse Buys
Impulse purchases or impulse shopping can wreak havoc on your finances and cause emotional and financial stress. They can also cause other negative consequences. For example, the individual may later experience buyer’s remorse or regret the decision because of the impulse that occurred when they made it. This means they haven’t thought it through, decided how to pay for it, or if it fits into their financial plan.
One of the things I wanted to share regarding impulse buying is that many people going through a life transition or getting sudden wealth can overspend and make rash buying decisions.
In one of the cases, the person’s spouse was really controlling. They were not allowed to spend money.
Their partner always had them on a budget, and once the spouse was gone and they had access to millions, it was like a little kid in a candy store. The trustee insisted upon the client hiring me. I remember we were in a meeting a few weeks afterward. This sweet woman said, “I want control of my money.”
I said, “I think you should have control of your money.” She replied, “I don’t like that it’s in a different place. I want it in my bank.”
I asked how much money she would be comfortable having in her bank, and we put it there. Three weeks later, they showed up, and I wondered how it was going. The trustee said they no longer followed that plan, so I asked what happened.
Home shopping networks
It turns out this woman was addicted to QVC. Once her partner died, she didn’t really have anything to do. The result was unwanted items that were bought on impulse.
She had no spouse telling her what to do or controlling the money. And she was shopping like crazy. Clearly, it was hoarding. She had all this stuff in this room where one of the children would come over once or twice a week and return items.
QVC has a lot of people who have this issue. They allow people to limit purchases once they’ve hit a specific buying limit.
That was just an example of where you see impulse buying in play.
Understanding Impulse Buys and How They Occur
We need to look at some of the psychological factors.
As I mentioned, when we make spontaneous or unplanned purchases, they’re often driven by our primal toddler brain. This governs emotions, desires, and external stimuli rather than our prefrontal cortex, which is much more into reasoning, being rational, and having a plan.
Impulse buys are typically characterized by their unplanned nature and the lack of prior intention to make the purchase. Meaning you see something, you have to have it. Compared to having a plan that you’re going to buy something, you save up for it and then buy it. I want to add to that.
How stores get us to buy more than planned
If you’ve ever gone to a grocery store and I don’t because I’m really bad in grocery stores and don’t enjoy it. Stores move items to new locations.
They do that because you can’t find something but see something else and buy it. And the whole thought process is a spontaneous buy.
Now, one of the things I do, which again is a problem, is that I’ve gotten a lot better since I’ve done my podcast on Overspending, and I am sharing with you what to do. As far as spending, I’ve been a lot better myself.
One of the things we do is use an app online to create a list of things we need, and it’s helped us remember things when we go to the store and stick with them. Recently, my husband and I were shopping, and I put random items in the cart. He asked, Is that on the list? I replied, “No, but I need it.” The question made me more aware of what I was buying. He’s clearly better at that than I am.
Causes of Impulse Buying
A dopamine hit is probably the biggest one.
1. Dopamine Hit
The adrenaline-produced feeling you get. Many call it a decision you make on the spur of the moment. It is an emotional trigger that gives us a dopamine hit. For example, that feeling that I have to have that purse or I have to have that bag.
2. Low Worth Barometer
It’s also a cause of low self-esteem, specifically, a low Worth Barometer. A belief you’re not enough, a belief that if you have that purse, you will be better. If you buy this particular type of makeup, you’ll look better.
3. Desire of Instant Gratification.
You want it now, as well as the fear of missing out (FOMO). The “buy now and get free shipping” or “only one is left.” FOMO often encourages impulse spending.
4. Fear of Missing Out (FOMO)
And a lot of us have FOMO, right? We must have it; it’s the last one, or only two are left.
I’m looking at getting this curling iron. They’re expensive, about $500 -$600.
I’m in this store and saw they had one. And I asked, “How much is it?” And it was more than it was at the other store.
The incentive and limited supply
But she said I could get a $50 coupon to buy more items in their store and that they had one left.
I thought that was so funny. So, I said, “I’m still in the shopping mode.” I am planning to get it. One of our credit cards has points where I can use it at certain stores, so it may not have cost me anything.
I wouldn’t make that decision without seriously considering it and knowing it’s what I want. One of the women at the place shared that she had it and said it was a great decision. If I spend that much money on a curling iron or a blow dryer, I want to ensure it is right.
Consequences of Impulse Buys
1. Short and Long-Term Ramifications
Their financial impact can have both short and long-term ramifications. So, the short term is more like you can’t afford rent, utilities, or the food you want to buy.
Long-term is like a broke retirement.
2. Buyer’s remorse
3. Stress and guilt
4. Marital problems
There’s a variety of them. I can’t tell you how many couples I’ve seen and met throughout my life that their marriage problem is impulse buys.
The best news is if a person’s willing to do the internal work to elevate their worth barometer and learn how to get in the driver’s seat.
Getting comfortable being uncomfortable.
This means that what you have to do is get comfortable with being uncomfortable. And when you can do that, whether it’s with food, whether it’s with buying things, whatever it is, you’re going to have a different life.
I weigh what I weighed in my 20s because I’ve learned how to deal with impulse urges to eat. I would eat when I was not hungry because I had nothing else to do.
Like you’re watching TV. What do you do when you watch TV? You eat. What?
And no, you don’t need to, but you have to get comfortable being uncomfortable because initially, you’re hungry or you think you are. It’s so fascinating. But once you get your prefrontal cortex in the game and your primal brain (toddler or child) is under control, everything in your life will change.
How To Avoid Impulse Buying with the three-day rule.
The goal is to get your prefrontal cortex to catch up to help you make better spending decisions, create better spending habits over the long term, and confidently make decisions. Purchases you know you can afford. Things that you’re consciously choosing to buy. And that you understand that when you say yes to one thing, you automatically say no to something else. So if you say, “Yes, I want to buy that,” you’re saying, “No to being able to retire when you want.” If you say yes, you’re saying no to something else you may want.
When we make spontaneous purchases.
This issue is a much bigger deal for people who have money because what happens is you’re okay now, and some people are really wealthy.
Look at all the famous people who have had multimillion-dollar contracts and have ended up bankrupt. The other night, on a TV show, they were talking about Wynona Judd, and she was saying twice she’s had major financial problems because she spends on a whim.
There are so many stories. They were naming four or five different ones. We have all read about them. It is because the impulse buys continue, and they’re getting fed from it and want more of it, and they can’t seem to get out of that cycle.
The 3-Day Rule Process
1. First, you have to identify what triggers you.
2. Determine your top impulse buys and what triggered you.
For example, you were online, out with friends, or fought with your partner. It doesn’t matter what it is; write it down.
This allows you to determine situations that trigger you. Many people buy something when they get into an argument with their partner. And especially if the partner thing is all about money. I see that a lot in passive-aggressive relationships where the partner is so concerned about finances that they fight, and the other partner is spending money. So just be aware of that.
3. Train your brain
We’ve got to determine when we are uncomfortable, meaning we’re stressed because of work. And then what we must do is sit in it and just notice it. I like to describe the situation as if you are witnessing it from a third eye. Look at her; she looks like she’s really stressed.
Once you start looking at it, you’re like, well, that’s not a big deal. But when you don’t have a trained brain, it can seem like you’ll get eaten by a lion because the fight or flight kicks in, and you think you’re in danger, and you’re like, oh, my gosh. I’ve got to either buy, eat, or do something.
No, I want you to get comfortable being uncomfortable. This is going to help you train your brain so you can avoid and reduce overspending.
4. Implement a cooling-off period
If you find something you really want, I want you to go home. Whether it is a regular purchase in a store or an online impulse purchase, you turn your computer off and follow the same process.
But what I want you to do is, whether you’re out shopping or on your computer or phone, I want you to stop and review your spending plan.
What have you earmarked for expenses, including trips, clothing, boots, or purses?
5. Wait three days
If you still must have it and can afford it after three days, you can purchase it.
This will allow you to clearly understand what you want and need and what you can eliminate. What I can tell you is this much. And I’ve done this work for 35 years, advising people and 40 years researching it.
This is a guarantee, and I can’t make many.
I guarantee that if you start practicing this and you apply it, and you take the time to get comfortable being uncomfortable, you learn how to quiet your mind with practices like meditation, yoga, and silent walks, you’re going to become so much better than you are right now. I used to have complete impulse buys, and now I rarely do.
We all have to know when we’re triggered, and we have to be present. You have fewer disagreements or quarrels with your loved ones when you’re present because you think before you speak. You eat less because you eat when you’re hungry, and you buy less because it doesn’t make you feel better. Buying something is not going to determine my self-worth, and that’s something fundamental, meaning I’m worthy regardless of whether I have a diamond ring on or not.
And I want you to get there, too. The first step is to incorporate practices that allow you to quiet your mind and build a rich inner life where you love yourself regardless of stuff out there.
As I mentioned, when you buy something, it’s the same as saying yes. You’re automatically saying no to something else. That is so important because a lot of times, what we’re saying yes to is what I want right now, and we’re saying no to a secure retirement, and that’s not ideal.
Additional tips to avoid impulse buys.
1. Practice mindfulness and focus breathing.
I will link to those in the show notes and the video.
2. Always create a list when you go shopping.
3. Until you stop making impulse buys or overspending, I encourage you to take cash when you go shopping, including grocery shopping.
Once, I went grocery shopping with $200. Some things I’m pretty good at but not produce. I was so stressed when I got to the checkout that the clerk asked if I was okay. Do I look okay? I was freaking out because I didn’t think I’d have enough money, and I ended up having, like, $2 extra. It cost $198.25, and I had $200 in cash.
The experience was eye-opening. It requires that you pay attention to what you’re buying.
4. Implement a cooling-off period.
The three-day rule provides you time to think and ask if you really want it and really need it. Next time, before I buy clothes, I will implement this. I don’t want things that I don’t love and that I don’t need. And so I am working on that alongside you, my friend.
5. Create a spending plan.
6. Make saving money a priority and reward yourself.
When you hit your savings goal, reward yourself. You can start with 70%. Achieving 85% is ideal, but start with 70% and then get to 80 or 85%.
If you don’t hit it, set a consequence.
A positive consequence is a massage on Friday or playing golf. The negative would be donating to your least favorite political organization. So, again, so powerful.
And most people are motivated by what they don’t want to do. Some people are motivated by what they want to do. But having a negative consequence and a positive one is also important.
7. Set spending limits.
8. Monitor spending habits to determine when you overspend.
9. Prioritize needs over wants, meaning what you really want to have versus what you need.
10. Lock credit cards in a safe.
Put your credit cards in a safe until you develop your prefrontal cortex and stop overspending.
This is a rational part of your brain. It will give you the space to say, “Yes, I really want that,” or, “I need that, and I can afford it,” as compared to buying it on a whim.
11. Make shopping lists for all purchases.
And bring only enough cash to pay for the items on the list. That is so important.
12. Limit or avoid online shopping
This is especially important if you have serious issues getting your prefrontal cortex to kick in. Once you do, then you can be less concerned about it. But initially, I want you to focus on the triggers, and online shopping is a big trigger for a lot of people.
Recap – Avoiding Impulse Buys with the 3-Day Rule
Impulse buys often provide a dopamine hit, meaning that adrenaline rush, and over time, it can wreak havoc on your finances and your mental health. There are short-term ones, like being unable to pay your mortgage or bills, or long-term ones, such as a delayed or broke retirement.
The first step is to recognize that you have a problem and then commit to developing your prefrontal cortex to calm down that primal toddler brain that wants it now. If you need to hire a qualified expert, apply the three-day rule. When you find something you love, whether out shopping or online, stop, wait three days, and review your budget.
If you still have to have it and can afford it, then you can buy it. Focus on what it looks like to live a secure retirement and a life you love, and then, every day, put a little bit of money and focus on creating that. You can enjoy your life now and still secure a bright financial future.
Continue to develop good financial habits for your long-term well-being, and then practice mindfulness, including focus breathing to calm down that primal brain and get in the driver’s seat of your life.
So there you have it.
Until our next episode, take one action that will help you create a secure financial future and retirement you love.
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Thank you so much for joining me for
Avoiding Impulse Buys with the 3 Day.
I’m Annette Bau (Bah oo)
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Bye for now.