We experienced so much uncertainty because of the pandemic. As we’re coming out of that uncertainty, it’s important to take a step back and see how that time has changed our habits – particularly our financial habits. A recent survey1 explored the financial, mental, and physical health of 2,000 Americans from pre-pandemic to the present. They also asked respondents about the financial habits they would like to change: 41% said impulse spending.
Pandemic Spending
Impulsive spending decisions may result in buyer’s remorse and can have negative repercussions on your financial position. Multiple factors contribute to impulse purchases. We can characterize these factors as external (situational and product-related factors, demographic and socio-cultural factors) and internal factors (affective processes and personality traits). The author of this article also notes that two affective processes drive unplanned purchases:
- Positive: Experience happiness/pleasure. Statements include: I like to shop for the novelty of it. I feel like I’m exploring new worlds when I shop.
- Negative: Avoid stress/anxiety. Statements include: After a new purchase, I feel relief. When I have many things to complete, shopping is a good distractor.
You will make impulse purchases in your life, and some of them will lead to buyer’s remorse. It’s helpful in those moments to bring some awareness to the act because it arms you with the knowledge to stop yourself from time to time so that unhealthy decisions don’t become detrimental patterns.
Making Fewer Impulse Purchases
How do effective feelings impact impulse spending in men and women? Women are more likely than men to engage in impulse spending because it is a positive experience. For men, there was no significant difference in impulse spending as a positive experience or to avoid negative emotions. As for personality, two traits predict impulse spending.
- Motor impulsiveness: Acting without thinking or on the spur of the moment. (Males and females)
- Cognitive complexity: Present-moment focus without thinking of future consequences. (Females)
The Dreaded Buyer’s Remorse
If you know your money motivators, experiencing buyer’s remorse after making an impulse purchase is not necessarily bad. However, it’s important to be aware of the motivations that drive your financial decision-making in times of uncertainty. Here are three steps drawn from therapeutic practice that you can put into action:
Observe: It’s important to stop and reflect on what is driving your financial decisions. Observe how you feel when you impulse spend.
- Describe: Take that observation further by putting words and descriptors behind what you noticed. Do your purchases bring you joy, or are they a source of discomfort or shame? Are your purchases something you want to share (with a friend/partner) or something you want to hide? Do these findings sound familiar? Maybe this is also how one or both of your parents handled money.
- Participate: Now that you understand why you make impulse purchases, be an active participant in those decisions. What might need to change?
