Canadians Spend $3720 Annually on Things They Don't Need
Impulse spending is taking its toll on Canadian households, according to a new BMO study.
The Psychology of Spending report found that 59 per cent of Canadians make impulse purchases, with half (52 per cent) regretting the purchases after the fact, and 43 per cent sometimes spending more in a month than they earn.
When do we make these ill-advised purchases? When we're feeling down and need to be cheered up (that's 60% of us) or because something's on sale (that's another 55% of us). Most sad of all is that 42% buy items they never use.
Interestingly, men spend twice as much as women do on impulse purchases each month (men spend $414 vs. $207 for women). Respondents believe they could save more than two-thirds of this amount if they made an effort to limit their spending.
Click below to view a gallery of top five impulse buys for men and women, and carry on reading the article for three great solutions to help you curb non-essential spending.
To combat impulsive spending, BMO Vice President Lily Capriotti suggested three practices that will help to curb the practice:
- Canadians can put in place to help track and control impulse spending, including setting aside savings on a regular basis
- Put off impulse purchases for an hour, which is long enough to weigh the consequences and avoid a rash decision
- Use online tools to track daily spending and set limits.
The Consequences of Impulse Spending
- According to the report, one-third (31 per cent) of Canadians have had to borrow money or take out a loan to pay for non-essential items, with 23 per cent unable to buy something they needed because of their spending on items they wanted.
- These habits are more common among younger Canadians. One-in-three (33 per cent) of those under 30 have been unable to afford something they needed because of spending on 'wants'.