Bloomberg Wealth: How to Stop Yourself From Impulse Buying

When my boyfriend broke up with me unexpectedly, all I wanted to do was buy a Taylor Swift concert ticket. Or a golden retriever puppy. 

For context, this was the weekend Taylor came to play at MetLife Stadium in New Jersey. As a lifelong fan and New York City resident, the idea of splurging on a ticket had crossed my mind long before the heartbreak. 

Suddenly, I had the perfect opportunity: Distract myself with three hours of a once-in-a-lifetime concert experience. 

The problem? Money. As much as I wish I could randomly drop more than $1,000 on an impulse purchase, that’s simply not in my budget or in alignment with my financial goals. 

But it was to resist. That’s a common problem: When emotions are running high, many people have the urge to buy things for a quick endorphin rush. 

It’s part of why  “buy now, pay later” appscredit cards can be so dangerous. With a few clicks, you can spend thousands of dollars on a whim. 

So how can you resist the urge to impulse buy?

Ryan Phillips, founder of GuidePoint Financial Planning in Virginia, recommends a 24-hour waiting period for anything in your shopping cart. Afterwards, you’ll likely have a better sense of whether you really want the item. 

You can also set aside a certain portion of each paycheck as “fun money” and then spend it guilt-free, said Karen Ogden, partner at Envest Asset Management. If that bucket is low one month, opt for free activities to boost your mood instead, like going on a picnic or taking a hike. 

Try to think about what you truly value the most, recommends Brittany Wolff, founder of Wolff Financial in South Carolina. Do you value an experience like a concert over buying new clothes? If so, adjust your budget accordingly. 

And this tip from Heath Biller, financial adviser at Fiduciary Financial Advisors in Michigan really stuck with me: “I encourage people to think about the amount of time they will have to spend at work to pay for something instead of thinking about the dollar amount. If someone wants to go on a trip for $1,000 and gets paid $20 an hour at work, they should ask themselves if the trip is worth spending 50 hours at their job to pay for it — more after you consider taxes.” 

So maybe a Taylor Swift concert ticket isn’t worth it. But a golden retriever puppy? I’m still considering. — Claire Ballentine

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Bloomberg Invest

Bloomberg hosted an investment conference at its headquarters in New York this week. Here are some highlights: 

• Coinbase’s Brian Armstrong said the SEC changed its “tone” in questioning last year, before a lawsuit landed this week. 
• Regulators are the first line of defense against illegal exchanges, said Nasdaq’s Adena Friedman.
• Billionaire Stan Druckenmiller says AI is here to stay, and thinks he’ll own Nvidia shares for several more years. 
• Millennial and Generation Z investors are more focused on doing good with their money, according to Ida Liu, global head of Citigroup Inc.’s private bank.

Bloomberg Opinion this week, Erin Lowry says Gen Z is thinking about retirement

Gen Z is the latest generation to stumble across the FIRE movement, or Financial Independence Retire Early. More than half already claim membership despite their limited years in the workforce. 

I’ve long been a cynic of the FIRE movement. It’s seductive, but felt like snake oil to me because those who evangelized the message rarely dug into two key issues: mental health and what it means to retire. The pursuit of FIRE is often a band aid for deeper problems. Chronic stress, burnout, depression and anxiety are all factors that could be triggered by work, but work is not necessarily the root cause.

Read her full argument

Financial FAQ

Can I start investing even if I still have debt? Or should I pay off all my debt first? 

If you have credit card debt, drop what you’re doing, stop reading, and get started paying that off right now.  There is no investment that will consistently or reliably beat the high interest rates charged by credit cards, and nothing will derail your financial future faster than allowing credit card debt to compound from month to month.  

Beyond that, not all debt is created equal, so focus on preserving flexibility. Most successful financial stewards understand that when utilized prudently, holding debt can offer you options over differing economic environments. If you have a mortgage at a low fixed rate of under 5%, you want to hold onto that debt as long as you can and invest any extra. Not only is mortgage interest in the US tax deductible, but saving and investing in the equity markets gives you opportunity for longer-term growth in addition to the appreciation in your home value.

When you have liquid savings and publicly traded investment balances, you can always pay off your debt but you can’t always borrow cheaply or sell your house to meet emergency cash needs. When making this determination, always ask yourself: What allows me the most financial flexibility? — Amy Hubble, principal investment adviser at Radix Financial 

Send us questions about your own financial dilemmas to [email protected]or fill out this form

Podcast — Green Pensions

Richard Curtis is the writer behind Bridget Jones Diary and Mr. Bean. His latest project is not a film, but trying to redirect billions in retirement savings to climate-friendly companiesListen to Richard's conversation with Bloomberg Green reporter Akshat Rathi on the Zero podcast.

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