Impulse Shopping is Fun
I was lying in bed this morning and the urge to do some impulse shopping for fancy work shoes online struck me. I’ve had my eye on some nice brown dress shoes that would go really good with the belt I got for Christmas. They’re about $130, but I’ve made the commitment this month to reduce spending so I can afford a race registration.
Take a moment to consider your purchases
So instead of hitting the checkout button on my laptop, I surfed over to another web page. Even though I’m limiting the amount of money that can go towards shopping this month, I’ve got no limit on how much I can invest. So to calm my urge to buy something new, I threw a couple hundred dollars into my Vanguard total stock market index fund. This officially put me over the $10,000 mark so I can transform it into VFIAX Admiral Shares (lower expense ratio).
Feeling my need to impulse shop sated, I moved on to the book I’ve been meaning to get into,and continued to enjoy a relaxing morning. Obviously this habit wouldn’t go so well if I needed that couple hundred dollars for rent or food, but I’ve got a significant buffer in my checking account so it can easily absorb my investing impulses. Sometimes you just want to buy something, and buying more cash producing assets tends to be a great choice.
When has it ever gone well?
Think back to a time when impulse shopping turned out well. It’s almost always cheaper to hold off for a few days. You might find a sale, find it for cheaper on Amazon, or just decide you really don’t need it. Here’s how my last few impulse purchases have gone.
- A Bill Bryson book for my Dad’s birthday: I was in the local book shop looking for a gift since it was a few days before my Dad’s birthday. We are going to hike a small portion of the Appalacian trail this summer so I got him A Walk in the Woods. It cost me $17. Had I waited a day, I would have found out that he already had the book, and that Amazon sell it for $8.
- My $100 Fitbit: A Fitbit is essentially a smart pedometer. I bought it on an impulse back in November just because I thought it would help keep me fit. So far I love it, but it’s not a whole lot better than a a $3 pedometer. It’s great at counting steps, encouraging exercise, and showing you graphs, but it turns out I was already pretty motivated beforehand.
- Appetizers: The other day I was out to dinner with a friend and I found myself ordering the bruschetta. It’s not that I don’t like bruschetta, theirs was actually really tasty, it’s just that restaurant portions are always about 200% of what a meal should be. So by ordering the appetizer as well, I pretty much got 250% of a meal. In retrospect it seems like a waste of money.
I guess the lesson I’ve got to come away with here is that it never hurts to think on an impulse shopping decision for a little while longer. Impulse investing, on the other hand, has always been great fun. Sure the value can drop the next day, but you’ve still put your money in an asset that will, presumably, make you richer over time instead of poorer.
That’s a great way of looking at it – with impulse spending it is almost always going to depreciate (and the “rush” of spontaneously buying wanes quickly), but with investing there’s more opportunity that it will appreciate over time (and, consequently, more sustainable enjoyment from it).
Agreed, and I guess I was surprised at how it fills the urge to spend money. I feel like I make the same decisions with foods. Salads appreciate and burgers depreciate in terms of my future health.
Great job not succumbing to impulse spending! This post along w/ Anna’s comment reminded me of the hedonistic adaptation post on MMM.
I love that one on MMM’s blog. We simply get used to what we choose to do often. I didn’t use to like oatmeal, but now I eat it everyday… I’m interested to see what happens to my spending pattern after my Frugal February Challenge. I’ve got a wrap up post regarding the challenge scheduled for Monday.
I think it’s awesome that you put money in an investment account instead of spending on an impulse item. I’m more of a procrastinator with buying stuff, so I usually wait for something better to come along.
For example, we needed an edger for our law (okay wanted really bad). I was tired of using a trimmer and completely scarring my lawn. I kept putting off the purchase because they’re expensive.
Well my wife’s work has some gimmick thing with our health insurance and some pedometers to keep bribe people into being healthy. Anyways, we racked up a lot of points and had enough points to get the edger I wanted for free.
Sorry for the tangent, but moral is I waited and got what I wanted for free, minus the taxes.
When you are willing to wait for something you want, chances are you might find a great deal. That’s an awesome example, plus you got a free pedometer, which I’m a big fan of. I also wait for stuff at my company to go on sale because every few months they give us a 50% employee discount which makes for fantastic deals sometimes.
I have an example of when impulsive investing wasn’t a great idea. A dude at work with absolutely no investing experience and a mountain of debt started buying loads of penny stocks on his USAA Brokerage account. Putting money into a Vanguard index fund = great idea. Investing blindly = horrible idea.
Yea, I know the type. One of my friends will invest in a company every once in a while just because he heard somewhere that they were supposed to be big in a few years… How about getting your financial house in order before making bets?