Even the greatest financial strategies can rapidly be destroyed by impulse purchases.
And yet, they are almost impossible to avoid due to sponsored social media posts and “revenge expenditures.”
Americans are depleting their financial savings and nearly half are increasing their debt as a result of rising living costs, increased stress levels, and worries about a potential recession.
Nevertheless, a survey by SlickDeals.net found that 73% of respondents claimed the most of their purchases are usually impulsive, which is a considerable increase from the 59% who said the same thing a year ago.
According to Slickdeals, consumers now spend $314 per month on impulsive purchases, up from $276 in 2021 and $183 in 2020.
Increased impulsive purchases as a result of the pandemic
The pandemic has undoubtedly altered how people spend their money.
“Consumers abandoned ingrained shopping habits, hurtling ecommerce into hyperdrive,” based on a McKinsey & Company research.
The report also stated that Americans are spending more money on experiences, travel, and clothing because they have become accustomed to doing so “to believe they can get whatever they want, whenever they want.”
However, it also makes consumers more prone to making impulsive purchases.
In a separate study released recently by the online lender SoFi, 56% of consumers claimed that more than half of their online purchases are impulsive. This finding is largely attributable to post-Covid changes in consumer behavior and the explosive growth of the buy now, pay later trend, which has coincided with the overall boom in online shopping.
Budget busters include BNPL, social networking, and intoxicated shopping
According to a number of studies, BNPL has contributed to consumers making impulsive purchases for more money than they can afford.
Nearly 50% of customers claimed they wouldn’t have made the same purchase if they hadn’t had the option to finance it, according to a LendingTree research.
Impulse buying is also encouraged by websites like TikTok, Instagram, and Facebook.
According to a recent Bankrate study, about half of social media users have made impulsive purchases because of something they saw in their feed. Up to 75% of respondents to SoFi’s survey claimed to have purchased a product after seeing it on social media.
The attractiveness of celebrities like the Kardashians is no longer the only factor; seeing influencers and even friends post when dining out, traveling, or shopping also contributes to the pervasive “Keeping up with the Joneses” mentality.
According to a separate study by Credit Karma, nearly 40% of young adults indicated they spend more of their money on experiences than on essentials like paying bills, in part because they want to post about it on social media.
Shopping while inebriated has increased as a result of the rise in expenditure on social media sites.
Over 50% of respondents, or 53%, acknowledge having shopped while inebriated as a result of more customers shopping 24/7 online, according to SoFi.
Clothing is the most common post-cocktail buy, according to social media posts about intoxicated online shopping. The most often mentioned retailer was by far Amazon.
Having regrets daily
Purchaser’s regret is nothing new. But in these circumstances, it’s more widespread than ever.
According to a DebtHammer.org survey of those who have used installment payment arrangements, 22% of them now wish they hadn’t.
According to a research by Bankrate, 64% of consumers admitted that they have regretted at least one purchase due to social media.
And when it comes to shopping while intoxicated, 65% of respondents stated they forgot to order something until it showed up on their doorstep, per SoFi.