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8 Ways to Overcome Impulsive Spending

8 Ways to Overcome Impulsive Spending

Back in 2007, with the economic recession looming, President George W. Bush offered questionable advice to his fellow Americans: “Go shopping more.”

There are plenty of behaviors we all should engage in more often—exercising, volunteering, showing kindness—but clicking “Buy now” is not among them.

And yet many of us follow that “go shopping more” advice all too readily. We shop recreationally, habitually, impulsively, and, in many cases, uncontrollably. In fact, 6 to 7 percent of Americans qualify as “compulsive buyers,” according to a 20-year review of studies published in the American Journal on Addictions.

“We may feel a temporary high when we make impulsive purchases, but there are serious long-term consequences,” says Koorosh Ostowari, author of The Money Anxiety Cure.

The financial perils of impulsive spending are obvious: major debt, an empty college fund, a plundered retirement account, perhaps the loss of your home, possessions, or dream vacation. As demonstrated by lottery-winners and celebrities alike, how much money you make doesn’t guarantee financial freedom—it all comes down to what you spend.

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But impulse buying endangers more than your bank account. Even if you’re well off, mindless spending clutters your home and your mind while costing you energy and time.

Spending on impulse may feel good temporarily, but it often triggers residual stress and anxiety, which can even lead to more spending. “Impulsive shoppers sometimes fall into a vicious cycle of buying, feeling bad about it, and then buying more to feel better,” says Koorosh.

Are you ready to stop making hasty, mindless purchases? The first step is to figure out why you’re doing it.

Have you ever purchased a $200 black sweater in spite of a) not having $200 to spend, b) already owning three blacker sweaters or c) having no room for it in your closet?

Koorosh points to four possible reasons you said, “I’ll take it!”

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  1. To fill an emotional void. “Some people use shopping to counteract a sense of emptiness, fear, guilt, stress, or boredom,” says Koorosh.
  2. Because you’re in the habit. Maybe you have an affinity for black sweaters and buy them on autopilot. “Sometimes we’re just not present during a purchase and don’t give it any thought.”
  3. To boost your self-image or social status. A fashion-forward purchase here and there is fine, but unconsciously purchasing each season’s new styles for the sake of social status can feel like an unforgiving obligation.
  4. To score a “deal”—and prove how business-savvy you are. Of course, where’s the “value” if you don’t need or can’t afford the sweater?

Whether you shop at Costco or at Tiffany, the strategies for putting a halt to impulsive spending are the same:

1. Browse Your Favorite Store—Without Buying

Notice what thoughts and emotions bubble up as you scan the shelves. Do you have that “wanting, craving, grasping” feeling? Then notice how you feel after you exit the store empty-handed.

“Saying no is an empowering feeling,” says Koorosh. “You think, ‘Oh my gosh, I caught myself,’ and you remember that feeling next time you go shopping.”

2. Scrutinize the Stuff in Your House

Take a hard look inside your drawers, cabinets, and closets. Are they crowded with items you never use? What prompted you to buy those items, and how did you feel when you brought them home? Did the purchases satisfy your needs?

How will it feel to own even more gadgets, earrings, or vintage salt-and-pepper shakers?

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3. Don’t Shop Unless You Feel Centered and Relaxed

Hitting the stores when you’re sad, mad, or stressed is like walking into a bakery when you’re famished: a ticket to overindulgence and remorse.

Look for other ways to nurture your emotional needs. When you feel blue, call a friend. When you feel bored, start a new book. When you feel angry, go for a power walk.

4. Pause Before Each Purchase and Check-In With Yourself

Ask: Do I really need this or do I just want it? Can I afford it? How many hours will I have to work to cover this purchase? How will I feel if I bring it home? Does my home have space for this?

We are constantly under pressure—from social media, from advertisers, and even our friends—to buy without thinking, so it’s critical to step back and reflect. “Unless we practice building that muscle of inquiry,” says Koorosh, “it stays weak. Just taking that little pause can make a huge difference.”

For major purchases, make it a bigger pause before you commit—for a few weeks at least. Then see if buying that kayak, TV, or mini-van still seems like a good idea.

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5. Shop With a List, and Don’t Buy Anything That’s Not On It

If you truly need new athletic shoes, fine, head to the store and buy a pair. But don’t walk into a store or go online without an agenda that passes your muster (see #4).

6. For Two Weeks, Buy Nothing but Groceries and Essentials

“It’s like doing a cleanse, like seeing what it feels like to eliminate donuts from your diet,” says Koorosh. “Just explore and see what happens.”

This practice is more of a commitment but will prove to you that you can live without that afternoon Frappuccino or a new cosmetic. Afterward, this can help you feel more satisfied with future purchases.

7. Make Gratitude a Daily Practice

Each day, list three things you dearly appreciate, whether it’s your daughter’s piano playing, your daily yoga practice, or the hummingbird outside your window. “When you remember what you are grateful for, you need less stuff to feel happy and satisfied,” says Koorosh. “Practicing gratitude opens up neurological pathways, taking us out of fight-or-flight survival mode into feelings of love and satisfaction.”

8. Track Your Spending

Taking a few minutes each day to monitor and think about where your money is going is a powerful, enlightening habit. In a recent survey conducted by Tiller Money, 79% of people said that tracking their spending with a simple spreadsheet has led to less impulsive spending.

If you find any of these strategies too difficult to implement and you think you may have a serious shopping addiction, consider seeking help from an experienced therapist or joining Debtors Anonymous.

Featured photo credit: Clark Street Mercantile via Unsplash.com

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Sharen Ross

Marketing Strategy Consultant

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Published on October 22, 2020

What Is Analysis Paralysis (And How to Overcome It)

What Is Analysis Paralysis (And How to Overcome It)

Have you ever taken so long trying to solve a problem that you just ended up going around in circles? How about trying to make a major decision and just freezing up when the time to decide came?

You might have found yourself gathering too much information, hoping it will help you make the best decision—even if it takes you too long to do so. This probably led to many missed opportunities, especially in situations where you needed to act on time.

Nobody wants to make the wrong decision. However, delayed decision making can have a hugely negative impact on all aspects of your life—from your personal relationships to your career. Delaying important decisions can be the worst decision of all.

At one point or another, people get stuck at a decision impasse they can’t seem to overcome. This is due to a mental blindspot called information bias, informally known as analysis paralysis.

Analysis Paralysis and Stalled Decisions

Information bias, or analysis paralysis, is our tendency to seek more information than is needed to make decisions and take action.[1] It is one of many cognitive biases that cause us to make mistakes during the decision-making process.

A related cognitive bias is the status quo bias, which is our tendency to prefer that things stay the same and fear any changes.[2] Together with analysis paralysis, these two dangerous judgment errors pose a threat to our successful navigation through our rapidly-shifting world.

Consider what happened to Lily, a consulting client of mine who’s a mid-level manager in the UX department of a large tech company. Lily had been there for 5 years and was thinking about switching to a startup after a couple tried to recruit her.

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However, she had been taking a lot of time making a decision. In fact, before she contacted me, she had already gathered information and talked to a lot of people for 7 months. Realistically, more information won’t sway her decision, but she kept trying to gather more information.

And then, there was the technology company that came to me after their growth started to decline. The company had initially experienced rapid growth with a couple of innovative products. However, its growth started to decrease—unfortunate, but not unexpected.

Essentially, the company’s growth followed the typical S-curve growth model, which starts as a slow and effortful start-up stage. This is followed by a rapid growth stage, then a slowdown in growth, often following market saturation or competitive pressure or other factors. This is the point where the company’s existing products reach maturity.

However, even before a slowdown hits, forward-thinking companies would innovate and change things up proactively. This is so they could have new products ready to go that would maintain rapid growth.

Unfortunately, this wasn’t the case with this particular tech company. Not only did they not address the potential decline but once the company’s growth stalled, the leaders dug their heels in and stayed the course. They kept on analyzing the market to find the cause of the problem.

Worse, a couple of executives in the company proposed launching new products, but most of the leadership was cautious. They kept on asking for guarantees that the products would be a success, demanding more information even when additional information wasn’t relevant.

Both Lily and the tech company remained paralyzed by too much information when they should already have taken action. While this situation isn’t unexpected, it is totally avoidable.

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As I told both parties when they consulted me, all they needed to do was to face analysis paralysis head-on and make a decision. But they had to follow the best decision-making process available first, didn’t they?

8-Step Decision-Making Process to Avoid Analysis Paralysis

I told Lily and the leaders at the tech company that we should never go with our gut if we want to avoid disasters in our personal and professional lives.[3] Instead, I advised them, as I advise you now, to follow data-driven, research-based approaches, such as the one I’ll outline below.

From hiring a new employee, launching a new product, selecting a Zoom guest speaker for your annual video conference to deciding whether to apply for a higher-level position within your company, the following steps will help you fight analysis paralysis and make the best decisions possible.

1. Identify the Need to Launch a Decision-Making Process

This is particularly important when there’s no explicit crisis that cries out for a change or decision to be made. Such recognition is also applicable when your natural intuitions are keeping you from acknowledging the need for a tough decision.

Remember that the best decision-makers take the initiative to recognize the need for decisions before they become an emergency. They also don’t let gut reactions cloud their decision-making capacity.

2. Gather Relevant Information From a Wide Variety of Informed Perspectives

Listen especially to opinions you disagree with. Contradicting perspectives empower you to distance yourself from the comfortable reliance on your gut instincts, which can sometimes be harmful to decision-making. Opposing ideas also help you recognize any potential bias blind spots, and this allows you to come up with solutions that you may not have otherwise.

3. Paint a Clear Vision of Your Desired Outcome

Using the data gleaned from step 2, decide which goals you want to reach. Paint a clear vision of the desired outcome of your decision-making process. You should also recognize that what seems to be a one-time decision may turn out to be a symptom of an underlying issue with current processes and practices. Make addressing these root problems part of the outcome you want to achieve.

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4. Make a Decision-Making Process Criteria

Make a decision-making process criteria to weigh the various options of how you’d like to get to your desired outcome. As much as possible, develop these criteria before you start to consider choices. Our intuitions bias our decision-making criteria to encourage certain outcomes that fit our instincts. As a result, you get overall worse decisions if you don’t develop criteria before starting to look at options.

5. Generate Several Viable Options

We tend to fall into the trap of generating insufficient options to make the best decisions, and this can lead to analysis paralysis. To prevent this, you should generate many more options than you usually would. Generate several viable options that can help you achieve your decision-making process goals. Go for 5 attractive options as the minimum.

Keep in mind that this is a brainstorming step, so don’t judge options no matter how far fetched they might seem. In my consulting and coaching experience, the optimal choice often involves elements drawn from out-of-the-box options.

6. Weigh These Options and Pick the Best One

When weighing your options, beware of going with your initial preferences. Try to see your preferred choice in a harsh light. Also, do your best to separate each option from the person who proposed it. This minimizes the impact of personalities, relationships, and internal politics on the decision itself.

7. Implement the Option You Chose

For implementing the decision, you need to minimize risks and maximize rewards, since your goal is to get a decision outcome that’s as good as possible.

First, imagine that the decision completely failed. Then, brainstorm about all the problems that led to this failure. Next, consider how you might solve these problems, and integrate the solutions into your implementation plan.

Next, imagine that the decision absolutely succeeded. Brainstorm all the reasons for success and consider how you can bring these reasons into life. Then, integrate what you learned into implementing the decisions.

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Finally, develop clear metrics of success that you can measure throughout the implementation process. This will enable you to check if you’re meeting the goals you identified in step 3. It will also help guide your goal-setting process—something to keep in mind when you use this decision-making technique again in the future.

8. Set a Reminder to Use the Process for Future Decisions

Regularly check if it’s time to employ the decision-making process once again. As discussed in the first step, there may be times when there’s no explicit crisis that cries out for a change, even though underlying issues might already be signaling that it’s time for a tough decision.

Setting a reminder—perhaps a visual one such as a note on your desk, or even just a scheduled alert on your phone—will ensure that you can catch decision-making cues before they’re due.

While Lily and the tech company initially had to fight off a lot of discomforts when using the process, they were ultimately rewarded with sound decisions they were immensely satisfied with.

This battle-tested method will do the same for you. It will certainly propel your decision-making and, at the same time, help you thwart analysis paralysis and avoid decision disasters.

Conclusion

Nobody wants to make the wrong decision, but you also don’t want to take too long and miss opportunities. By using a data-driven and research-based approach to decision making, you can nip analysis paralysis in the bud and make the best decisions.

More Tips to Overcome Analysis Paralysis

Featured photo credit: Muhmed El-Bank via unsplash.com

Reference

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