Since Covid-19 vaccines became available, and with movement restrictions easing in parts of the world, there have been more opportunities to spend impulsively on items and experiences that you didn’t get to enjoy early in the pandemic.
With the freedom to do more, consumers are spending more.
For the first seven months of 2021, retail sales in the US were up 15.5 per cent compared with the same period in 2020, according to the National Retail Federation.
As some restrictions have eased, it’s likely that you’ve had new spending needs: returning to work, visiting with friends and family and partaking in other back-to-normal activities. But when the non-essentials threaten to put your finances in jeopardy, it’s important to keep your financial goals on track.
Here are five strategies to help you navigate impulse spending.
1. Wait a day or two
When you feel that overwhelming urge to spend, wait 24 to 48 hours to see if you still want an item, Brad Klontz, a financial psychologist based in Colorado, says.
“Ask yourself: 'Can I afford this? Where am I going to put it? How am I going to feel about this purchase tomorrow? How am I going to pay for this?',” he says.
This pause can help calm the “emotional brain” and activate the “rational brain”, the one that holds you accountable tomorrow, he adds.
2. Practise safe credit card habits
Credit cards may help or hurt, depending on how you spend. People spend significantly more money when using their credit cards instead of cash, Mr Klontz says. He suggests keeping a cash envelope to use in areas where you tend to overspend, such as dining out.
Also, minimise impulses by not storing credit card information on websites or apps, says Kathy Longo, a certified financial planner and president of Flourish Wealth Management, a financial planning firm.
“It’s much easier to be like, ‘I’ll look at it later because I’m not going to go find my purse and get my credit card',” she says. That time can indirectly make you rethink a purchase.
Once you do charge a purchase to a credit card, pay it off in full to avoid interest and save money. For large purchases, consider using a card with a 0 per cent introductory annual percentage rate.
3. Use kerbside pickup
Many retailers have offered kerbside pickup since the start of the pandemic. It’s one option that Lauren Miller, a Massachusetts resident, uses to stay on track in her debt-free journey.
Avoiding the inside of the store means “you’re not seeing those seasonal items and those flashy marketing strategies”, she says. These can often lead to impulse buying.
Some retailers may charge for kerbside pickup or require you to spend a certain amount to waive the cost. You’ll have to weigh whether it’s worth paying a few dollars to avoid the potential cost of impulse spending.
If you have to go into a store and the urge wins, do an online price comparison of the item, Ms Longo says. “See if you can find something similar at a better price or maybe on sale,” she adds.
The desire to make impulse purchases lessens, I think, because I know I have the permission to make an impulse purchase if I choose to
Lauren Miller,
YouTube content creator
4. Give yourself a splurging allowance
Build a personal allowance into your budget for potential must-have purchases. When Ms Miller first started to curb impulse spending, she gave herself $20 to use at each store. Over time, that amount lowered to $5 per store as she embraced the habit. Since she frequents only about four stores per month, the total doesn’t dent her budget.
“The desire to make impulse purchases lessens, I think, because I know I have the permission to make an impulse purchase if I choose to,” she says.
If you exceed your allowance, take that amount out of next month’s budget, or supplement it by redeeming credit card rewards for cash back or statement credit if it makes sense.
But if impulse spending is constantly causing you to stray from your budget and get into debt, it may be time to re-evaluate spending habits or speak to a credit counsellor or financial therapist.
5. Get an accountability partner
An accountability partner can help you dissect your reasoning for a purchase. They don’t have to offer an opinion, just an ear. The goal is to hear yourself talk about it out loud and make a decision that aligns with your goals and values, Mr Klontz says.
He suggests choosing a spending limit that merits discussion. For instance, if a purchase exceeds $100, then it may be worth running by an accountability partner.
Another option is to use social media followers to stay accountable.
As a content creator on YouTube, Ms Miller documents her progress on social media platforms by sharing her plans to stick to a shopping list.
The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
MATCH INFO
Borussia Dortmund 0
Bayern Munich 1 (Kimmich 43')
Man of the match: Joshua Kimmich (Bayern Munich)
Retirement funds heavily invested in equities at a risky time
Pension funds in growing economies in Asia, Latin America and the Middle East have a sharply higher percentage of assets parked in stocks, just at a time when trade tensions threaten to derail markets.
Retirement money managers in 14 geographies now allocate 40 per cent of their assets to equities, an 8 percentage-point climb over the past five years, according to a Mercer survey released last week that canvassed government, corporate and mandatory pension funds with almost $5 trillion in assets under management. That compares with about 25 per cent for pension funds in Europe.
The escalating trade spat between the US and China has heightened fears that stocks are ripe for a downturn. With tensions mounting and outcomes driven more by politics than economics, the S&P 500 Index will be on course for a “full-scale bear market” without Federal Reserve interest-rate cuts, Citigroup’s global macro strategy team said earlier this week.
The increased allocation to equities by growth-market pension funds has come at the expense of fixed-income investments, which declined 11 percentage points over the five years, according to the survey.
Hong Kong funds have the highest exposure to equities at 66 per cent, although that’s been relatively stable over the period. Japan’s equity allocation jumped 13 percentage points while South Korea’s increased 8 percentage points.
The money managers are also directing a higher portion of their funds to assets outside of their home countries. On average, foreign stocks now account for 49 per cent of respondents’ equity investments, 4 percentage points higher than five years ago, while foreign fixed-income exposure climbed 7 percentage points to 23 per cent. Funds in Japan, South Korea, Malaysia and Taiwan are among those seeking greater diversification in stocks and fixed income.
• Bloomberg
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Price, base: Dh141,740 (three-door) / Dh165,900 (five-door)
Engine: 1.5-litre four-cylinder (Cooper) / 2.0-litre four-cylinder (Cooper S)
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Date started: 2018
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Based: Abu Dhabi
Sector: TravelTech
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Favourite camping spot: Anywhere I can get to.
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Favourite spot in the UAE: Al Dhafra. It’s unique, natural, inaccessible, unspoilt.
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Dos
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- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
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Monday January 6 - UAE v Namibia
Wednesday January 8 - Oman v Namibia
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Everton 1 (Lindelof 36' og)
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
