Experts who have looked into the issue of spending say that there is an important distinction between compulsive spending and impulsive spending and it lies with the internal motivation, or reason, for making the purchase.

While impulsive spending is largely unplanned and happens at the moment in reaction to an external trigger — such as seeing the desired item in the shop — compulsive spending is more inwardly motivated. A compulsive shopper will plan the shopping experience as a way to avoid or relieve uncomfortable internal feelings, such as anxiety.

Compulsive spenders are also more likely to experience negative consequences as a result of their shopping than impulsive spenders, such as running into financial difficulties, having arguments with family members, and experiencing problems with work life. They are also more likely to fall into a pattern of addictive behavior, in which they shop more and more in an attempt to stave off stress and anxiety. This is how shopping addiction develops.

All the details you should know about impulsive and compulsive spending are provided in this article.

• What is Impulsive Spending?
• What is Compulsive Spending?
• How do you Deal with Impulsive Spending?
• What is the Difference Between Compulsive and Impulsive Behavior?
• What causes Impulsive Spending?
• Is Compulsive Shopping a Mental Disorder?
• How do I Stop Compulsive Shopping?
• What are Examples of Impulsive Behavior?

What is Impulsive Spending?

Although self-discipline is the best way to control spending, too many people are caught in a cycle of impulsive spending that seems to have a life of its own, beyond the limits of self-discipline.

Read Also: How to Control your Spending

Tahira K. Hira, a professor of family and consumer science at Iowa State University says, “Low self-esteem appears to be related to impulsive spending. Couple low-self esteem with lack of knowledge of current personal financial status, combined with other savings barriers such as procrastination, stress and insecurity, and the result is a greater focus on paying for needs today and forgetting those for tomorrow.The key is getting a grasp of cash-flow management. Those who don’t know extend their income with credit cards.”

Impulsive buyers buy on a whim, make unplanned purchases, usually lack self-control in buying situations, and lack clear priorities in spending, which results in overspending, unnecessary additional debt, unused articles, and family arguments.

Most impulsive spenders sabotage their own prosperity with the “I want it now syndrome,” which is characterized by spending beyond their incomes. This in turn leads to persistent fear, unremitting debt, and depression and feeds into a downward cycle of worry and low self-esteem‚ and the instant gratification of impulsive spending‚ deepening debts‚ more worry‚ more spending.

The best way to overcome short-term buying impulsiveness is to (1) leave the presence of the item; (2) price the item in three other places; (3) keep tight control on the use of credit cards; (4) buy only what is needed and practical; and (5) have spending priorities.

Discipline is the key to controlling impulse buying, long term. “By what a man is overcome, by this he is enslaved” (2 Peter 2:19).

Before buying on impulse, list the item on an Impulse List, talk about the item with your spouse, obtain comparison prices, and wait seven days before purchasing the item.

Most impulse purchases can be eliminated by this discipline.

What is Compulsive Spending?

When people do not feel confident in themselves and have very low self-esteem, they may look to factors outside themselves as sources of value. Compulsive spending is a means by which people fill the vacuum in the heart that should be filled with a sense of personal acceptance.

Listed below are 10 signs and symptoms that characterize compulsive spending.

1. Shopping or spending money as a result of being disappointed, angry, or depressed.
2. Having emotional distress or chaos in personal and family lives because of shopping or spending money.
3. Having arguments with others regarding shopping or spending habits.
4. Feeling lost without credit cards.
5. Buying items on credit that would not be bought with cash.
6. Spending money feels like a reckless or forbidden act.
7. Feeling guilty, ashamed, embarrassed, or confused after shopping or spending money.
8. Lying to others, especially the spouse, about what was bought or how much money was spent.
9. Juggling accounts and bills to accommodate spending.
10. Feeling of powerlessness and helplessness to overcome the compulsion to spend.

There are some viable steps that can be taken to help correct the problem of compulsive spending

The first thing is to understand the nature of the problem: the emotional needs and personality traits that have given rise to compulsion.

Second, develop and implement practical applications that include balancing outgo with income (do not spend unless there is money to spend), budgeting, setting goals, and getting quality financial counseling.

Third, eliminate credit buying. Compulsive spending is many times an addiction to credit cards. It generally takes 30 days to break someone from any addiction such as drugs, alcohol, and so on. Credit cards can be included with this group.

Therefore, either destroy the credit cards, place them in a drawer out of sight, or give them to someone for safekeeping, and do not use them for 30 days. Within those 30 days it will become apparent that life goes on without the need for credit cards.

The U.S. Commerce Department says that U.S. personal-savings rate hit an all-time low of -0.2 percent in September of 2000 and as of January 2005, savings has not returned to a positive level.

That means that Americans are spending more than they earn, which leaves less than nothing for saving.

Since impulsive and compulsive spending patterns can often be justified or rationalized in our current society in which these unhealthy spending cycles are encouraged rather than discouraged, savings will most likely continue to decline and debt will continue to increase until self-discipline and self-control are established and the impulsive/compulsive spending precedent is brought under control.

How do you Deal with Impulsive Spending?

If you’re in the store, or at an online site, the forces of advertising and marketing are sometimes too powerful to overcome. And yet, they can be beat, with some simple strategies.

The trick, of course, is to think about it. It’s when the impulse urge is subconscious that it’s most dangerous. If you give it some thought and realize that you have the urge, you can apply these strategies to beat it.

If impulse buying has been secretly undermining your monthly budget, here are 10 simple strategies for beating the urge. Choose the method that works best for you, or use them in combination.

1. Create a 30-day list

Make a new rule: you can’t buy anything (except necessities) until a 30-day waiting period has passed. Put a 30-day list on your refrigerator, and when you have the urge to buy something, put it on the list with today’s date. After a month has passed, you can buy the item. Many times the urge will have passed and you can just cross the item off the list. This works if you stick to your rule. The only exceptions would be groceries and other similar necessities.

2. Don’t go to the mall

You only get the urge to buy on impulse if you’re in a shopping area (or if you’re watching TV). So, prevent the urge from happening in the first place by not going shopping. Don’t go to the mall or Walmart or other shopping areas.

Only go to a store if you have a specific necessity to purchase, and go with a list. Don’t buy anything not on that list. Now get out as soon as possible. Don’t just walk around window shopping for entertainment, or you will be sorely tempted. Find other ways to have fun.

3. Don’t go to online retail sites

Just as the mall will create the urge to buy, so will online sites such as Amazon. They make it too easy to buy something. Instead, stay away from these sites.

4. Monitor your urges

Make it a point to monitor your urges, if it’s a big problem. Keep a little piece of paper, and put a tally mark on it every time you get the urge. This helps you to become more conscious of the urge, which is usually something we don’t even notice. Different symptoms can appear, such as faster breathing or a faster heart rate, when we have the urge. By becoming more aware of the changes in our body, we can begin to get the urges under control.

5. Take a deep breath

When you do get the urge, there are ways to calm it down. Deep breathing, self massage, walking around, and drinking water can all help control the urge. Take 10 deep breaths, and the urge will often be diminished enough to resist.

6. Calculate the value in life energy

If you’ve been a reader of The Simple Dollar for long, you know about how to calculate your true hourly wage. Keep that number handy, and the next time you want to buy something, divide the price of the item by your true hourly wage … this will tell you how many hours of your life you had to give up to buy that item.

Sometimes the number of hours can be eye-opening, especially for more expensive items. Consider whether you really want to give up that much of your life for that item.

7. Plan your purchases

Making a list before you go shopping is important. If you can make it a habit to stick to that list, you’ll eliminate a lot of little impulse buys. For other purchases, make it a habit to plan them, save for them, shop around, and even see if you can get it for free.

Going through this process ensures that your purchases are more deliberate, and less on impulse. Plan ahead for birthday and Christmas gifts, and other large purchases that you know are coming up in the month ahead.

8. Freeze your credit card

If using your credit card is a problem, consider giving it up completely. If that’s not a good option for you, try literally freezing your card. Put it in a Ziploc baggie with water, seal it good, and put it in the freezer. Don’t write the credit card number anywhere. Now, if you want to make a purchase with the card, you’ll have to unfreeze it. That little wait of a couple of hours can be enough to stop you from making any purchases.

9. Ask questions

Before you buy anything, ask yourself a series of questions. Is the purchase going to improve your life in some important way? Is the purchase supposed to make you feel better? Does it help you meet one of your life goals? Will it simplify your life? These are useful questions to help you evaluate the value of a purchase, and why you’re making it. Be honest with yourself — don’t try to sell yourself!

10. Keep the end in mind

It’s useful to have clear goals in mind at all times. What do you want to do with your life? Do you have financial goals that you’re trying to accomplish, in the long-term and medium-term? Keep your savings goals in mind, and know when you’re about to make a purchase how the purchase will affect your goals.

What is the Difference Between Compulsive and Impulsive Behavior?

For some, impulsive or compulsive behaviour becomes an addiction, leading to serious mental health disorders that take control of their lives. Learning to recognize these behaviours, their causes, and the disorders associated, can better educate us about the mental health challenges facing our community, and help end the stigma surrounding mental health disorders.

Impulsive Behavior

Impulsive behavior is acting prematurely without forethought about the potential consequences of those actions. Impulsive behavior is usually driven by the desire for positive or pleasurable results, such as relief from emotional pain or the need for a feeling of happiness. However, in the long-term, this behavior can result in several negative consequences including greater emotional distress, regret, deliberate self-harm, and even criminal activity.

While impulse control disorders are relatively common psychiatric conditions, experts have yet to isolate a specific cause. It’s thought that a combination of biological, environmental, psychological, and even cultural or societal factors may play a contributing role. Current research into the origins of impulse control disorders indicates that genetics, neurological imbalances, and the environment in which an individual lives or was raised are a factor.

Impulse control disorders also commonly coincide with other mental health issues like depression, PTSD and obsessive-compulsive disorder.

Impulse Control Disorders include:

• substance abuse;
• pathological gambling;
• sexual addiction;
• binge eating;
• compulsive shopping;
• intermittent explosive disorder;
• kleptomania;
• pyromania;
• trichotillomania.

Compulsive Behavior

In contrast to impulsivity, compulsive behavior is a conscious act driven by a desperate need to alleviate anxiety and stress. Often small, restricted and repetitive, compulsive behaviors act as a safety valve, offering a distraction, and providing a sense of control where none seems to exist. Completing the compulsive behavior may bring relief but the action is often unpleasant, offers little reward, and can create new feelings of frustration and shame.

At it simplest, compulsive behavior is a response to the thought “If I don’t do this action, something terrible will happen.”

The most common compulsive disorders are hoarding – the excessive accumulation, and the inability to discard, possessions regardless of their value; and obsessive-compulsive disorder (OCD) – a pattern of uncontrollable, unreasonable thoughts and fears that lead to repetitive behaviors.

Symptoms of Obsessive-Compulsive Disorder include:

• excessive cleaning, bathing, and handwashing;
• repeatedly checking things – cell phones, locks, the oven;
• obsessive orderliness – arranging things in a particular or precise way;
• compulsive counting;
• ritualistic tapping, touching, or rubbing;
• demanding encouragement or reassurances;
• following a strict routine.

Some impulse control disorders can also be classified as compulsive behaviour, as the action becomes deliberate and the response sought becomes a need without reward.

In today’s modern society, the promotion of stress, fear, and anxiety has become a part of daily life, as has our constant need for happiness and validation. Satisfying these innate human emotions is what has led to an increase in impulse control disorders, compulsive behavior disorders, and addiction in our community.

What causes Impulsive Spending?

There are three main reasons we see for why people impulse buy. They are:

• Our emotions
• Our past experience
• We think we’re getting a good deal

We impulse buy because of emotions.

Emotions play a huge part in what we buy. Our personal finances are just that—personal. So, it makes sense that when something’s going on with us personally, it shows up in our money habits too.  

When you’re having a rough day, does a little retail therapy sound like the cure? Maybe it’s nothing extreme. Maybe it’s just grabbing a new baseball cap or a new pair of earrings. You tell yourself it’s not a big deal—you just want to get something nice to make yourself feel better.

Making decisions based on pure emotion is a surefire way to let impulse buying take control. And sneaky marketers know this. They’ll play on your emotions with their ads, hoping it’ll hit a nerve that causes you to buy.

We impulse buy because of our past.

If impulse buying and overspending is a problem for you, it could be that you were never taught how to handle money well. According to a 2019 poll, “the way [their] parents handled money” and “the state of [their] household when growing up” were the top two reasons people gave about why they handle money the way they do.

Thinking about how money was handled in the household you grew up in will help you understand the foundation for your beliefs about money. If you’re married, this can also help you get to the root of money arguments you and your spouse may have. Their experience was probably totally different than yours, which means you guys are coming at this from two different perspectives.  

We impulse buy when we believe it’s a deal.

According to a survey done by SlickDeals, more than half of shoppers’ impulse buy because of a sale. But you guys, this is a total marketing tactic. When you think you’re getting a deal or “free shipping,” you’re way more likely to pull the trigger on the purchase—and that’s exactly what they want you to do.

Is Compulsive Shopping a Mental Disorder?

Although it’s not officially described in the Diagnostic and Statistical Manual of Mental Disorders (DSM), it has been suggested that compulsive shopping disorder, also known as compulsive buying disorder, is either a type of impulse control disorder, a behavioral addiction, or possibly even related to obsessive-compulsive disorder (OCD). 

The characteristics of compulsive shopping disorder include:

• Difficulty resisting the purchase of unneeded items.
• Financial difficulties because of uncontrolled shopping.
• Preoccupation with shopping for unneeded items.
• Problems at work, school, or home because of uncontrolled shopping.
• Spending a great deal of time doing research on coveted items and/or shopping for unneeded items.

Despite this temporary relief, many people with compulsive shopping disorder feel disappointed with themselves and depressed about their apparent lack of control over their behavior.

Common items purchased include clothes, shoes, jewelry, and household items, such as containers, dishes, etc., with many compulsive shoppers unable to resist items on sale, in particular.

Most people who are affected by compulsive shopping disorder prefer to shop alone or online rather than subject themselves to potential embarrassment by shopping with others.

How do I Stop Compulsive Shopping?

Compulsive shopping is a dangerous habit that can wreak havoc on a person’s financial life, and yet our society is set up to enable constant and unhealthy spending. If you or someone you know seems to be struggling with this, you can find a few tips below that will help.

1. Only Carry Cash

Technology has made it easy to swipe that credit card without feeling the weight of large or frequent purchases, but it’s much more difficult not to notice cash disappearing. Take all the plastic out of your purse or wallet and only carry cash for a while.

Chances are, you’ll be much less likely to spend impulsively when you find yourself counting out a wad of bills that are about to leave your hands.

2. Track All Your Spending

Write down every purchase you make – what you bought, and what it cost. Literally track every penny. This is an accountability technique and a real eye-opener.

Most people who try this technique – even if only for a week or a month–end up being shocked (and sometimes horrified) at how much money they spend on little things like fast food and impulse purchases, and how quickly those purchases add up to a substantial amount of cash that could have been better spent (or saved) elsewhere.

If you’re wondering where all your money is going, this is a great way to plug up a leak in your cash flow.

3. Avoid Temptation

If someone is addicted to gambling, we tell them to steer clear of the casino. If someone is drinking too much, we advise them not to keep alcohol in their house.

The same goes for impulsive shopping, although shopping can be a little trickier to avoid than casinos and booze because opportunities to spend money tend to crop up around every corner. Still, it’s important to know your triggers.

If your weakness is the mall, try avoiding the mall specifically, especially when you’re feeling disappointed, scared, or angry, as these are vulnerable moods that often lend themselves to relapses. If you’re a sucker for the clothing outlets, don’t go there.

If your thing is the auto parts store, or your local electronics dealer, or the dollar section at Target – you know the drill.

4. Focus on Larger Goals

It can be difficult to eliminate something from your life without replacing it with something better. Rather than focusing on the absence of shopping, remind yourself of the long term benefits you are working toward.

Are you saving up for a major purchase?

Each time you deny yourself a shopping trip, remind yourself that what you are actually doing is saving up to buy your first home, or that car you’ve been dreaming about, or to take the trip you’ve been dying to go on.

The money you would have spent shopping is being reallocated toward something much more exciting than a few new items from the mall.

5. Leave Your Credit Cards At Home

Credit cards have led to massive amounts of debt and countless stories of financial woes, ruined lives, and emptied savings accounts. Don’t let this happen to you! If you are a compulsive shopper, chances are you’re familiar with credit cards and maybe have a few of them.

You need to do two things as quickly as possible:

Leave them at home, and pay them off.

Remove their info from any websites where the numbers may be saved for automatic purchases.

Then pay down the balances before you get destroyed by interest.

Credit card companies know exactly what they are doing, and if they weren’t making good money by getting people into debt, they wouldn’t still be in business.

6. Wait a Week

Part of the thrill of compulsive shopping is seeing something you like and buying it on the spot. But it’s amazing how many of our compulsive purchases end up being things we never would have thought about again if we only could have managed to leave the store without them.

Next time you’re tempted by an item in a store, tell yourself that if you still want it in one week, you can come back and buy it. You might be surprised at how few items you’re still thinking about a week later.

You will forget about most of the items you thought you needed, and this little mind trick can end up saving you a lot of money.

7. Ask for Help

You should never be ashamed of being open and vulnerable, admitting your struggles, and asking for help. We all struggle with something in life. If one of your struggles is compulsive shopping, you are not alone, and you do not need to feel embarrassed or ashamed.

Ask for help. Confide in someone you trust and ask them to hold you accountable. Visit a therapist if you feel it might be helpful.

Invite your partner or a close friend into your recovery process – they can help you cut up your credit cards, remind you to track your spending and encourage you when you feel like giving up.

Overcoming compulsive shopping is a difficult battle in which the culture is betting against you, but you don’t have to do it alone. Shopping is ubiquitous in our culture, and there will always be new ways to spend money.

It is not difficult to find yourself in a place where you feel compelled to purchase, and where you may even seek out shopping as a remedy for negative emotions.

What are Examples of Impulsive Behavior?

Here are 5 examples of (many different) impulsive behaviors that could be destroying your mental health.

1. Excessive Drinking

Excessive drinking and binge drinking are dangerous, as alcohol alters chemicals in the brain and affects how neurotransmitters function, which is crucial for good mental health.

We all know that drinking has a way of making us release our inhibitions…and that isn’t necessarily a good thing. For example, the impulsiveness of excessive drinking can lead to even more regrettable impulsive behaviors, like starting a fight or having unprotected sex. Alcohol is a depressant, and excessive drinking can make a depressed person more depressed, as well as more likely to contemplate suicide or self harm.

2. Taking Drugs

There’s a slew of dangerous drugs out there that can cause both long- and short-term negative effects on the mind. Many drugs are highly addictive, so what started as an impulsive decision (to try a certain drug) can result in full blown dependency, especially in someone already predisposed to addiction.

Drugs create changes in the brain, ranging from paranoia to hallucinations — and those effects might not stop when your trip is over. For example, using methamphetamine can increase the risk of schizophrenia symptoms, and using cocaine long term alters the brain in a way that makes it harder to feel pleasure and happiness without using drugs.

3. Becoming Violent & Aggressive

Everyone gets angry from time to time, but most people are able to resist actual violence. However, some folks have trouble containing their rage and impulsively end up physically fighting someone, punching objects, breaking things, or yelling.

In the long run, resorting to violence and aggression when angry will result in an inability process anger in a healthy way. Plus, people who lash out are likely to experience guilt and shame after their violent episode.

Domestic violence is also a problem for those with impulse control issues, making a healthy relationship unsustainable, and traumatizing your partner. Not to mention, there are financial and legal implications if you damage somebody’s property, or worse, physically injure someone.

4. Gambling

Some people can gamble responsibly, putting a few dollars on black or enjoying the camaraderie and excitement of a weekly card game with friends. However, an impulsive bet on a horse race or a big win from a slot machine can expose somebody to a gambler’s high, fueled by adrenaline and the excitement of risk taking.

When a gambling habit gets out of hand, it can cause a multitude of problems in someone’s personal life. Gambling can eat up your time, leave you in debt, or cause you to pay more attention to the habit instead of important things in life, like relationships or work.

Overall mood and happiness may become dependent on gambling wins, and depression is likely to occur when a gambler takes big losses. Gambling can also become a means of escapism. Due to a lack of coping skills, escapists can’t sit with their problems and emotions in a healthy way.

5. Binge Eating

Yes, food seems to get more delicious by the year, and available at the touch of a finger and in a near-instant, but a line needs to be drawn somewhere! As with the other impulsive behaviors, what may start as “treat yourself” self-care can turn into a full blown habit…in some cases, an eating disorder.

Read Also: This is How Your Grocery Store is Tricking You Into Spending More Money

When impulse control is lacking, binge eating can turn into a serious problem. People who binge might become reliant on food to help them deal with stress or negative emotions. If they’re having a bad day and food is in front of them, they might not be able to stop eating — even past the point of feeling full. Oftentimes, binge eating results in a vicious cycle that perpetuates poor self-esteem.

What Should you do know?

To stop making dangerous, impulsive decisions, you have to make a conscious effort to change your ways and get help.And there’s no better time to turn things around than now.

Impulsive behaviors can have long term effects on both physical and mental wellbeing. If you’re not sure if you have a serious problem with these behaviors, chat with a doctor or mental health professional to get some feedback.