Psychology of spending: Impulse Spending

So this is what happens with me: I open my grocery delivery app to order the essential groceries that I need for my home. When I checkout, I get three packs of chips, a dozen yogurts, some Korean ramen, and groceries. 

 

This is what impulse buying is. They are unplanned purchases done at a whim or instant desire to purchase. The most important reason it happens is that you feel excited when you find something you like (but not necessarily need). Positive emotions, such as excitement, happiness, or even stress relief, can trigger the desire to reward yourself immediately, leading to impulsive purchases. We seek instant gratification to elevate our moods or alleviate negative feelings. Hence, impulse purchases.

 

At a whim!

‘

Various cognitive biases can influence impulse spending. For example:

 

• Anchoring bias: Consumers may fixate on a high original price, making the current discounted price seem like an excellent deal.

• Confirmation bias: Shoppers might only consider information that supports their impulse purchase, ignoring potential downsides.

• Sunk cost fallacy: Once people start considering a purchase, they might overlook its actual value in favor of justifying the time and effort spent on decision-making.

 

The brain's pleasure centers release dopamine in response to rewards, reinforcing the desire for instant gratification. This can lead to impulse buying to seek pleasure and satisfaction in the moment.

 

Here are some specific examples of impulse spending scenarios:

 

1. The Checkout Line Impulse:

You're waiting in line to pay for your groceries and see a display of chocolates and candies near the cash register. You didn't plan to buy sweets, but the colorful packaging and the temptation of a quick treat prompt you to add them to your purchase.

​

2. The Limited Edition Collectible:

You're browsing an online store for a specific item when you notice a limited edition version of a product. The fear of missing out on this unique item pushes you to buy it immediately, even if it's more expensive than the standard version.

 

3. The Flash Sale Purchase:

You receive an email notification about a 24-hour flash sale with significant discounts on various products. The urgency of the sale convinces you to buy items you weren't initially considering, thinking it's an excellent opportunity to save money.

 

4. The Social Media Influencer's Recommendation:

An influencer you follow on social media promotes a beauty product, claiming it's life-changing. You feel compelled to buy it without thoroughly researching or considering if it suits your needs.

 

5. The Stress-Relief Buy:

After a tough week at work, you pass by a boutique with a "sale" sign. Shopping feels like a way to de-stress and reward yourself, so you buy some items on the spot.

 

6. The Seasonal Clothing Trend:

Fashion magazines and websites showcase a new trendy clothing style for the season. You feel pressured to keep up with the latest fashion, so you purchase items that align with the trend but may not be timeless pieces.

 

7. The Online Shopping Scroll:

While browsing an e-commerce website, you see a "recommended for you" section displaying products based on your previous purchases. The convenience and ease of clicking "buy now" lead you to purchase items you didn't plan to buy that day.

​

8. The Impulse Tech Gadget:

You visit an electronics store to buy a specific item, but the latest tech gadget on display catches your eye. The excitement of owning the newest technology makes you buy it spontaneously, even though it wasn't on your shopping list.

 

9. The "Buy One, Get One Free" Temptation:

A store offers a "buy one, get one free" promotion on a product you frequently use. Even though you only need one, the perceived value of getting an extra item for free convinces you to buy more than necessary.

 

10. The Peer Pressure Purchase:

Your friends are shopping for expensive designer bags, and they encourage you to get one, too, assuring you that it's a good investment and will make you feel more stylish and confident.

 

Impulse spending is not solely a product of marketing tactics; it is deeply intertwined with our emotions. Stress, sadness, excitement, and even happiness can all trigger the desire to make impromptu purchases to seek instant gratification or cope with our feelings.

​

Dr. Emma Carter, a behavioral psychologist, emphasizes, "Emotional spending is a form of self-soothing. When we feel low, stressed, or bored, shopping can provide a temporary high and a brief escape from our emotions. However, this emotional relief is short-lived and often followed by feelings of regret."

 

Finding Balance and Building Resilience

 

While impulse spending can be enticing and even momentarily satisfying, it can lead to financial strain and cluttered lives filled with unnecessary possessions. So, how can we strike a balance and build resilience against the allure of impulse spending?

 

Creating Awareness: Recognizing our emotional triggers and understanding the marketing strategies used to manipulate our decisions is the first step towards regaining control over our spending habits.

 

Mindful Consumption: Before making a purchase, take a moment to consider whether the item aligns with your values and needs. Evaluate whether it brings genuine value to your life.

 

Budgeting and Shopping Lists: Setting a budget and adhering to a shopping list can be practical barriers against impulsive purchases, ensuring we spend only on what we truly need. It seems like a monumental task, but it is what is required to keep track of your money.

​

Delaying Gratification: Implementing a "cooling-off" period, such as waiting 24 hours before making a non-essential purchase, can help differentiate between impulsive wants and considered needs. I often tell myself to “sleep on it” to finally decide whether or not I want it.

 

By identifying the emotional triggers and external influences that drive us to make unplanned purchases, we can regain control of our financial decisions and embark on a journey of wiser and more fulfilling consumption.