confessions_of_a_shopaholic_12I watched one of my favourite movies last night: Confessions of a Shopaholic. It’s a cute movie with the right balance of comedy and romance…but it also addresses a very real problem for a lot of people. The main character is a shopaholic (I bet you didn’t get that from the title!) and she has dug herself into a pretty deep hole with unpaid debt, collections calls and the inability to pay for her basic needs. She says that making a new purchase makes everything feel wonderful, and once that wonderful goes away, she needs to do it again.

While I can’t say I completely understand the euphoria that a shopaholic feels when they make a purchase, I definitely understand impulse buying. I think we are all guilty of it at one time or another. Whether it is spotting the perfect handbag that you just have to buy, or deciding to order dinner rather than make it, you are making an unplanned purchase. We hire professionals and mull over the details when we are considering buying mutual funds, but we make purchases (and sometimes big purchases) with just a few minutes of consideration.

So how can we get the things we want without risking our retirement funds? By planning for unexpected purchases. Just like we set aside at least 10% of our income for retirement, it’s also good to set up a percentage of your income for emergencies, and also for surprise purchases. I budget for the impulse purchases that I know will happen, like ordering pizza or going out for ice cream, but a separate savings for the larger purchases is always a good idea.

Waiting 24-72 hours before making these purchases is another great way to save yourself some money and be sure that you can afford the item. Sometimes that thing that you absolutely have to have is not as exciting a day later. Or perhaps there are some bills or other purchases that you hadn’t remembered in the heat of the moment.

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