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Friday, March 29 2019
Source/Contribution by : NJ Publications

There is a famous saying on shopping by Bo Derek that "whoever said money can't buy happiness simply didn't know where to go shopping". This pretty much sums up the change in the shopping mindset in the last decade or so. Most of us have seen a dramatic change in the spending behaviour and today most of us are buying a lot on impulse and desire rather than a rational, planned shopping. Well, this article takes about smart shopping and better still, on how to control the urge to spend. We are sure that you would enjoy reading this article (though not as much as you love shopping) and try to adopt some of the ideas shared here the next time you shop...

How have our spending habits changed?
The young earning generation today would easily remember that shopping for clothes & accessories was limited and often carried only at times of festivals when they were children. The things we bought were also limited in variety as compared to what we are buying today. Add to this the growing number of branded retail shops and shopping malls lined up at every few kilometers. Armed with the Credit Cards in our hands, it is now really out of fashion to think about bank balances and pre-plan shopping in advance. Even those in their 40s and 50s have been shopping much more for themselves and their children than what their parents shopped. The mantra today is that if you feel it, get it ! There are also many of of us who believe that they will feel better if they shop! This is what we can call as impulse or emotional buying which forms a major part of our spending today. On the extreme side, this has given rise to a new type of addiction and disease called as "compulsive shopping" where people suffer from 'shopoholism'” and they literally shop till they drop or run out of Credit Card balances.

Techniques to control spendings:
Well, no rewards for guessing why we need to control our spendings. There is a popular saying that 'A money saved is a money earned'.

Many times we get excited looking at new products and offers and make instant buying decisions only to later find that the purchase was really useless. Controlling emotions may be tough but you can easily do it if you genuinely desire to control your spending. There are many techniques which can help curb emotional spendings by you. I am listing a few here...

  • Avoid spending time, get-together, meetings or dining at shopping malls. Stay away & stay rich!
  • Make it a rule to pay for all impulse buying using cash and by debit card, if you are buying online.
  • Avoid going shopping with people who are wealthier than you. You might often end up buying more stuffs which are expensive and not needed by you as the tendency to compete / show off comes into picture.
  • Be strict with kids and make planned list of items that you feel are important for them and also mention the purchase month /week & budget. Communicate this to your kids and make sure that your kids understand & agree to it.
  • Prepare a list of items that you feel are required & desired and decide a budget for same. Avoid going beyond this list in any of your shopping trips.
  • Before buying things that others (like relatives, neighbours, friends) have and you don't, think of all the things that they don't have and you currently have or will have once you save for future.
  • Keep a limited monthly budget for impulse spending only as shopping can be a stress reliever. Decide the limits as a fraction, say 1/3rd, of the estimated impulse spendings done in last 6-12 months.

Steps for smart buying:

Step 1: Check need: Before buying anything, define what you looking for and amount you are willing to spend. In case of any unplanned spending, think or consult others, like relatives, friends, etc. if you really need the item before you make the purchase decision. In case you are sure, you may move to the next step.

Step 2: Delay a while: Don't buy on same day when you have finalised the items in any store. Postpone the action for at least couple of days or a week, depending on what you intend to buy. In case of sale offers, it is better to go shopping at least 2/3 days before the offer ends.

Step 3: Research online: Always do an online search for the desired item in case you have just finalised but not yet purchased the item. There are many sites today that offer information & reviews for products/offers from insurance policies to shoes to laptops and holiday packages. Look for additional information or negative feedbacks / reviews to really make up your final decision to purchase. You may also better check out similar products or offers and compare that best suits your needs.

Step 4: Best deals: Check for offers / discounts from retail stores or online shops before buying. Ask for upcoming sales offers from your local stores and wait for same, if possible. You may also check for any interest free payment options through instalments.

Step 5: Bills & Warranty: Always ensure that you have the proper bill and warranty card dated & stamped. Keep these documents safe as you are like to need it some day. Try to get extended warranties for items, if on offer.

Step 6: Return/Replace Policy: Try to always buy with shops offering return &/or replace policy, even if they are a bit costly. Do not remove / destroy the packaging/ labels, etc. after you bring the items home. That way if you do not like the product, you always have the chance to return same and request refund or replace the item.

Strictly Not for Impulse Buying:
There are some things that must 'never' be bought on impulse or emotions. Decisions in such cases must only be made after careful thought and study. Decisions on home, property, car, insurance or health policy, home renovations, etc. made on impulse can cost you dearly in long run.

Not Spending = Savings = Greater Wealth:
You can easily save 5-15% of one's total monthly / yearly expenses if you stop spending on impulses and follow the tips given above. Thus, you can invest such savings for future. You will be surely guaranteed greater wealth & better financial health. A spending cut of just Rs.500 monthly when put in mutual fund SIP can potentially give you Rs.1.31 lacs in 10 years @ 15% returns. Savings made from foregone impulse purchases can also be directed to more fruitful / required spendings like better food habits, children study, quality holidays, etc.

Spending on impulse is very common in modern age, especially among the younger generation, including young parents. Controlling this urge to spend can help you save quality money which could be put to better use.

Spending on impulse is very common in modern age, especially among the younger generation, including young parents. Controlling this urge to spend can help you save quality money which could be put to better use.

Imp.Note: We are registered NJ Wealth Partners and this interview published is sourced from NJ Wealth with due permissions. Reproduction of this interview/article/content in any form or medium by any means without prior written permissions of NJ India Invest Pvt. Ltd. is strictly prohibited.