Have you ever thought about impulse buying and wished that one day you had a full control over your spending habits? Let say you promised to manage your money wisely so you can stretch the budget until payday. But when a friend have invited you at the Robinson mall, you found yourself swiping the credit card to purchase a new pair of Nike shoes and a branded T-shirt. Or maybe you had a scheduled to buy groceries during weekend, and you end up grabbing items that were not on the list. Those scenarios are clear examples of impulse buying.
It simply means an unplanned decision to purchase stuff which has been secretly undermining your monthly budget. In addition, people nowadays embrace the culture of consumption which enables to succumb of purchasing to acquire more stuff.
It’s hard to curb impulse buying behavior especially if an OFW is aware that he will be receiving a huge salary at the end of each month. After all, you only live once and so you have to enjoy life now like what the proverbial statement goes: “Aanhin pa ang damo kung patay na ang kabayo.” This kind of thinking triggers an OFW to live like a one-day-millionaire. Surely, there is no room to delay gratification.
While it’s true that an OFW’s wealth is worthless when he’s dead, impulse spending can impact one’s financial lifestyle and goals. Let me share with you six things every OFW need to know about impulse buying.
-
Social Pressure
There are some people who cannot resist the temptation of buying products which their friends have bought. The need to be accepted by other and wanting to belong is one reasons for impulse buying. When you cannot follow the latest trends and fashion among your friends, you will feel like you’re out of place. Imagine when everyone is using an iPhone 7 and other latest gadgets while yours is an old one.
-
Sense of competition
Sense of competition simply means needing to have what everyone else. A classic case of competition is about spending money on stuff you don’t need, to impress people you don’t like. This habit will put you into debt if not control wisely. For instance, the social media is one major factor that contributes a sense of competition and has brought envy among Filipinos. When your friends posted pictures about their travel to Singapore, you felt you wanted to book a ticket to Hong Kong so you can also have pictures to show on Facebook or Twitter and other social media. Again, the ultimate reason of sense of competition is to keeping up with the Joneses.
-
Showing Off
This mentality occurs when a person decides to buy a new item in the mall to show to show with his friends that he has the “latest”. Men usually talked about their new cars and while women tend to show off something about fashion like clothes, jewelries, and latest gadgets. Impulse buyers are more social, status-conscious, and image-concerned. However, showing off is simply the enemy of simplicity and frugality.
-
Enticing or appealing advertisement
The mall sales and easy credit with zero percent interest are very tempting to consumers. It’s hard to say no to cash load and credit cards because it is easy to avail. Furthermore, advertising industries use a strategy called “association” which means creating positive emotions connected to the product.
For instance, sporting equipment companies use successful athletes like Lebron James or other TV personalities in their ads to create a strong psychological connection with customer. When a customer sees his idol endorsing certain products, he would hardly resist the temptation.
-
Credit card spending and delayed gratification
It’s convenient to own all kinds of credit cards that are available in the market. Although the idea about credit card is “use now, pay later,” it will incur penalties once you failed to pay balance on time. Since penalties are issued for late payments, this could be a problem when the little charges accumulate over time. It is mostly happen when a person is failing to keep track of the balance in his various accounts.
Needless to say, it’s more appealing to enjoy purchases than to put your money in any investments which has potential to grow over time. It’s pretty much similar with a marshmallow experiment conducted to children at Stanford University. Researchers told the kids to select marshmallow, and that if they ate it immediately, they wouldn’t receive any more. If they could delay their gratification for a few moments, they’d double their marshmallows.
-
Out of depression
Some people tend to do shopping as an emotional relief or when they are severely depressed and they need to forget about work pressure. For instance, when you’re feeling blue and socially isolated, you shop. It’s like an instant therapeutic solution that gives pleasure after making several purchases. Rik Pieters of Tilburg University have emphasized that loneliness can foster materialism, but materialism of the right type can reduce loneliness.
Curb spending when you are depressed and find healthy ways to address the issue. While you’ve been happy making purchases at the moment, remember to think of your financial goals. Instead of becoming too attached with materialism, hang out with people who are constantly happy–even if they have lesser things. Explore simple recreations which will give you real joy.
Finding the right balance in spending
The central issue about spending habits is to find the right balance between satisfying your needs and wants when making purchases while at the same time saving and investing wisely. Ultimately, you’re the one who is in charge of making sound financial decisions. Remember, being an OFW is not forever and financial education should be your top priority to achieve your financial goals.