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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 July 29, 2020

How to Build Strategic Thinking Skills for Effective Leadership

How to Build Strategic Thinking Skills for Effective Leadership

Have you been thinking of how you can be a more strategic leader during these uncertain times? Has the pandemic thrown a wrench at all your carefully laid out plans and initiatives?

You’re not alone. The truth is, we all want some stability in our careers and teams during this disruptive pandemic.

However, this now requires a bit more effort than before and making the leap from merely surviving to thriving means buckling down to some serious strategic thinking and maintaining a determined mindset.

Is There a Way to Thrive Despite These Disruptions?

Essentially – yes, although you need to be willing to put in the work. Every leader wants to develop strategic thinking skills so that they can enhance overall team performance and boost their company’s success, but what exactly does it mean to be strategic in the context of the times we live in?

If you happen to be in a leadership position in your organization right now, you are most probably navigating precarious waters given the disruptions caused by the pandemic. There’s a lot more pressure than before because your actions and decisions will have a much greater impact these days not just on you, but also to the people who are part of your team.

Companies often bring me in to coach executives on strategic thinking and planning. And while pre-pandemic I would usually start by highlighting the advantages of strategic thinking, nowadays, I always begin these Zoom coaching sessions by driving home the point that this pandemic has now made strategic thinking not just an option but an absolute must.

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Assessing and making plans through the lens of a good strategy might require significant work at first. Nevertheless, you can take comfort in the fact that the rewards will far outweigh the effort, as you’ll soon see after following the 8 strategic steps I have outlined below.

8 Steps to Strategic Thinking

As events unfold during these strange times, you’re bound to feel wrong-footed every now and then. Being a leader during this pandemic means preparing for more change not just for you, but for your whole team as well.

As states and cities go through a cycle of lockdowns and reopening, employees will experience the full gamut of human emotions in dizzying speed, and you will often be called on to provide insight and stability to your team and workplace.

Strategic thinking is all about anticipation and preparation. Rather than expending your energy merely helping your company put out fires and survive, you can put the time to better use by charting out a solid plan that can protect and help you and your company thrive.

Take the following steps to build solid initiatives and roll out successful projects:

Step 1: Step Back, Then Set the Scope

One of the things that leaders get wrong during their first attempt at strategic thinking is expecting that it is just another item on a checklist. The truth is, you need to take a good, long look at the bigger picture before anything else. This means decisively prioritizing and stepping away from tasks that can be delegated to others. Free up your schedule so you can focus on this crucial task at hand.

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Then, proceed with setting the scope and the strategic goals of the project or initiative you plan to build or execute. Ask yourself the bigger question of why you need to embark on a particular project and when would be the right time to do so.

You need to set a timeline as well, anywhere from 6 months to 5 years. Keep in mind that your projections will deteriorate the further out you go as you make longer-term plans.

For this reason, add extra resources, flexibility, and resilience if you have a longer timeline. You should also be making the goals less specific if you’re charting it out for the longer term.

Step 2: Make a List of Experts

Make and keep a list of credible people who can contribute solid insight and feedback to your initiative. This could range from key stakeholders to industry experts, mentors, and even colleagues who previously planned and rolled out similar projects.

Reach out to the people on this list regularly while you work through the steps to bring diverse insight into your planning process. This way, you will be able to approach any problem from every angle.

Bringing key stakeholders into this initial process will also display your willingness to listen and empathize with their issues. In return, this will build trust and potentially pave the way for smoother buy-in down the line.

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Step 3: Anticipate the Future

After identifying your goals and gathering feedback, it’s time to consider what the future would look like if everything goes as you intuitively anticipate. Then, lay out the kind and amount of resources (money, time, social capital) that might be needed to keep this anticipated future running.

Step 4: Brainstorm on Potential Internal and External Problems

Next, think of how the future would look if you encountered unexpected problems internal and external to the business activity that seriously jeopardize your expected vision of the future. Write out what kind of potential problems you might encounter, including low-probability ones.

Assess the likelihood that you will run into each problem. To gauge, multiply the likelihood by the number of resources needed to address the problem. Try to convert the resources into money if possible so that you can have a single unit of measurement.

Then, think of what steps you can take to address these internal and external problems before they even happen. Write out how much you expect these steps might cost. Lastly, add up all the extra resources that may be needed because of the different possible problems and all the steps you committed to taking to address them in advance.

Step 5: Identify Potential Opportunities, Internal and External

Imagine how your expected plan would look if unexpected opportunities came up. Most of these will be external but consider internal ones as well. Then, gauge the likelihood of each scenario and the number of resources you would need to take advantage of each opportunity. Convert the resources into money if possible.

Then, think of what steps you can take in advance to take advantage of unexpected opportunities and write out how much you expect these steps might cost. Finally, add up all the extra resources that may be needed because of the different unexpected opportunities and all the steps you committed to taking to address them in advance.

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Step 6: Check for Cognitive Biases

Check for potential cognitive biases that are relevant to you personally or to the organization as a whole, and adjust the resources and plans to address such errors.[1] Make sure to at least check for loss aversion, status quo bias, confirmation bias, attentional bias, overconfidence, optimism bias, pessimism bias, and halo and horns effects.

Step 7: Account for Unknown Unknowns (Black Swans)

To have a more effective strategy, account for black swans as well. These are unknown unknowns -unpredictable events that have potentially severe consequences.

To account for these black swans, add 40 percent to the resources you anticipate. Also, consider ways to make your plans more flexible and secure than you intuitively feel is needed.

Step 8: Communicate and Take the Next Steps

Communicate the plan to your stakeholders, and give them a heads up about the additional resources needed. Then, take the next steps to address the unanticipated problems and take advantage of the opportunities you identified by improving your plans, as well as allocating and reserving resources.

Finally, take note that there will be cases when you’ll need to go back and forth these steps to make improvements, (a fix here, an improvement there) so be comfortable with revisiting your strategy and reaching out to your list of experts.

Conclusion

A great way to deal with feelings of uncertainty during this pandemic is to anticipate obstacles with a good plan – and a sure road to that is practicing strategic thinking.

In the coming months and years, you’ll need to continue navigating uncharted territory so that you can lead your team to safe waters. Regularly doing these 8 steps to strategic thinking will ensure that you can prepare for and adapt  to the coming changes with increasing clarity, perspective, and efficiency.[2]

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Featured photo credit: JESHOOTS.COM via unsplash.com

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