How Financial Scrapbooking Can Help Stop Impulse Buying

How Financial Scrapbooking Can Help Stop Impulse Buying

By

Marsha Walker Eastwood, B.S.Ed., MSHSV

Each year millions of Americans spend millions and millions of dollars on impulse buying. The strategic product placement of feel-good snack items and small electronic accessories in retail store check-out aisles is only the tip of the budget-busting iceberg. Our spending behaviors are driven by a myriad of emotions including transient sadness, depression, guilt, joy, and ego.

Impulse buying related to transient sadness can include purchases of anything from craft items and woodworking materials to a new pet. People experiencing depression are always in search of a true feel-good experience, so perusing yard sales, thrift stores and flea markets may become their weekly spending adventure. Many a garage, attic, basement, and spare room is host to an abundance of impulse purchases all made for future. Most guilty spending is impulsive. Frivolous purchases of perhaps unwanted gifts such as expensive jewelry, apparel or tools can be costly and not all reflective of the intent behind them….a sincere apology for causing hurt.

Impulsive joy spending is usually tied to the feeling of needing to do something for self. Landing a new job, getting a raise, and receiving money for a special occasion are all reasons to celebrate. What better way to celebrate a windfall than to blow it on an expensive lunch with friends. Landing a new job can also lead to reckless ego spending. The overwhelming urge to rush right out and buy hundreds of dollar’s worth of clothing to make a statement and garner attention is a trend that many times served as the beginning of a costly addiction that can lead to financial failure. In almost all these scenarios, no real tally is ever kept of the amount of money spent on impulsive buying, and that is why the behavior goes unchecked.

Unlike utility bill receipts where usage is documented to justify the expense, with very few exceptions receipts for impulse purchases are discarded, along with the price tags. This leaves no record of where the money went and why. This is where the importance of creating a financial scrapbook comes into play. The Merriam-Webster dictionary defines scrapbook as “a blank book in which various items (such as newspaper clippings or pictures) are collected and preserved.”  In other words, scrapbooks are an organized method of keeping track of things of value or personal significance which can be revisited as often as desired. This theory can also be applied to spending behaviors.

The first step is selecting the right kind of book and tools. A simple 8 ½ x11 bound artist’s sketchbook is the most durable and cost-effective choice. It is  portable and does not require internet access. Scotch tape, a bottle of school paste, colored ballpoint pens, and highlighters are all the tools you will need, and a small, zippered pouch makes the perfect toolbox. It is now time to move on to the second step – naming your financial scrapbook. Think of it as an expanded journal that is reflective of your financial lifestyle. Step three is the one that can be the most enlightening but painful. Most people think of financial matters in the short-term or the here and now, making it from paycheck to paycheck. However, financial scrapbooking requires thinking outside the little here and now box and looking at your big financial picture. This picture will create the foundation for your scrapbook. This is where you create the purpose for your scrapbook.

If you are a must have it now, no matter what your income levels, you may routinely run out of money before your next payday or pension deposit. If this is the case the purpose of your scrapbook should be to get a clear picture of what you buy, where you buy, and why you buy. You can start this process by taking a picture of each purchase and the location of the store. This includes everything and anything in   addition to your regular shopping list and personal items, and apparel. Once everything has been pasted or taped you can begin a personal dialogue about what, when, why and how. Did you really need the item(s)? How much of a role did product placement or an informercial play in the purchase(s)? Was the lure of mall shopping irresistible? Was your favorite store having an incredible sale that enticed you to buy too many items that you may really have no use for? How did you pay for your purchases-debit card, major credit card or store credit account? What frames of mind were you in? How deeply did your spending on non-essentials impact your budget for essentials such as food, utilities, and gas to get to work? Answering these questions in the scrapbook will help sharpen your big picture and create a financial goal of not only spending less but re-organizing priorities. Create a timeline and always make a note of the date and time for each entry, your feelings with icons, and any ideas on how to moderate behavior.

The success of any project is contingent upon commitment, and part of the commitment to financial scrapbooking should include a reasonable allocation of time. Get into the habit of photographing and documenting as soon as the purchase occurs. If you don’t, it will only be a short matter of time before you lose track of things and lose interest in maintaining the scrapbook. It is sometimes difficult to remember on Friday how you felt on Monday when you bought an item. Take a serious look at your methods of payment. Do you really need to carry a checkbook when you have a debit card attached to it? How many credit cards do you need in your wallet or purse? If a card is within $20.00 of being maxed out, it should be removed from your wallet, and the date documented in the scrapbook. If you have a credit card designated for emergencies, it should be placed separately from the others making it easier to document those purchases. After you make a purchase as soon as you arrive at the office or home highlight “unplanned” purchases such as peanuts purchased at the gas station, or a candy bar at the pharmacy while picking up a prescription. At the end of each day place all loose change in a narrow mouth container which makes it easier to deposit than withdraw.

Your financial scrapbook can become a learning tool in other ways as well. If you find interesting financial articles about spending trends online or in magazines you can print and/or clip and paste them into your book. Each month document the impact the scrapbook is having om your bank account and credit card balances. The results surprise you. After six months your scrapbook provides a window into what drives your financial behavior. Remember you have documented your feelings as well as your purchases.

The relationship you have with money is unlike any other. It is one that lends itself to vicarious ownership. The way you search for As Seen on TV items or trying to revisit better times by purchasing vintage items that you have no use for,  except to extend a memory or because it is trendy all serve to create a financial connection that feeds into your impulse buying. Trying to recreate the past  often leads to impulse spending. Do you really have any use for the old quilt that resembles the one your grandmother had? The same can be asked about the old farm implement you saw at a garage sale, or overpriced bubble lamp at the estate sale. Convincing yourself that you really are going to find time to use up all those skeins of yarn to make family sweaters doesn’t justify another two-for one sale purchase of  more yarn, and the last thing an overstuffed closet filled with items still bearing price tags is the addition  of more items.

Filling the coffers of online and brick and mortar vendors to make yourself feel less sad, less guilty, less ego-maniacal and less worthy only masks the underlying problems. Each year impulse buying becomes more of a major factor in the number of bankruptcies, divorces, and crimes of desperation. Creating and maintaining a financial scrapbook gives you the big picture of how, why, when, and where of impulse buying and a roadmap on how to modify spending behaviors.

©Marsha Walker Eastwood

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