From Little Treats to Trouble: New Study Exposes The Hidden Financial Impacts of Impulsive Spending

News provided by

Aug 09, 2023, 05:00 ET

LEHI, Utah, Aug. 9, 2023 /PRNewswire/ -- Nearly all (94%) of American adults admit to spending impulsively, with purchases like dining out (55%) and clothing/shoes (53%), being among the most common sources, according to a new study commissioned by YNAB and conducted online by The Harris Poll among over 2,000 U.S. adults. Among impulsive spenders, 53% of them cited emotional fulfillment as the leading cause of engaging in this form of spur-of-the-moment retail therapy.

Little Treat Culture with @theorganizedwallet on TikTok

This study on impulse buys comes on the heels of a social media trend known as "little treat culture" where people impulsively treat themselves for a quick boost of happiness. The term "little treat" has over 55 million views on TikTok. However, for many, impulse buying has a sneaky way of adding up. It is shown to delay big financial goals for more than half of impulsive spenders (52%) and sometimes causes financial stress for 47%.

"It's important to spend money on things that bring joy and align with your goals and priorities," shares money and lifestyle expert Ashley Lapato of @theorganizedwallet (84K followers on TikTok). "Sometimes, that means indulging in a little treat because, well – you earned it or had a bad day. People often feel like impulse shopping makes them 'bad' at money, and that's simply not the case. Setting even a few dollars aside each month for a little treat gives us permission to spend without guilt, enjoy life, and stay on track with goals down the road."

Nearly everybody spends impulsively now and then. Even though almost 6 out of 10 Americans (56%) are using a form of budget or spending plan, impulsive purchases still cause regret and debt. There has to be a better way for Americans to make financial progress, reduce their money stress, and still leave room for guilt-free spending – because who doesn't love the occasional serotonin boost of a little treat?

"It's unrealistic to think that you can eliminate all impulsive spending, and frankly, unreasonable to imagine a day-to-day without ever buying a latte, new book, or ordering takeout," says Jesse Mecham, founder of YNAB. "I don't want to live in a world where spending money isn't fun. The key to getting a handle on the stress caused by impulse buys is to increase awareness of where every dollar is going, be honest about how frequently you spend impulsively, and create a realistic and flexible plan going forward. This might be a hot take: the biggest mistake most people are making is not overspending, it's under-budgeting in certain categories."

Other key findings include:

Nearly two-thirds (64%) of impulsive spenders have regretted purchase decisions they've made impulsively
Impulsive spending has delayed big financial goals for 52% of impulsive spenders, including paying off debt (27%), building an emergency fund (22%), and saving for retirement (18%)
Fear of Missing Out (FOMO) is among the top three causes for Americans' impulsive spending (20%)
More than half of impulsive spenders use credit cards to pay for their impulsive purchases (55%)
More than half of impulsive spenders (51%) have had debt over the past year as a result of their impulsive spending
The most popular impulsive purchases among impulsive spenders are dining out (55%) and clothing/shoes (53%)
68% of Americans say they are more tempted to spend impulsively during the holiday season (October-December)
While nearly 6 out of 10 of Americans (56%) are using a budget/spending plan of sorts, nearly half of those budgeters who spend impulsively (49%) report sometimes feeling financial stress because of impulse spending behavior

FOR MORE INFORMATION:
To learn more about YNAB, the impulsive spending survey, or to schedule an interview, contact Haley Cemper at [email protected]

METHODOLOGY:
This survey was conducted online within the United States by The Harris Poll on behalf of YNAB from June 22 - 26, 2023 among 2,051 U.S. adults ages 18 and older, among whom 1,945 spend impulsively. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 2.7 percentage points using a 95% confidence level. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact Haley Cemper at [email protected].

ABOUT YNAB: YNAB is a simple method and budgeting app that has taught millions of people to change their relationship with money. People find YNAB because they want to pay off debt and make financial progress—they stay because they've stopped fighting about money and have never slept better. More than just a budgeting app, YNAB offers an ever-evolving list of helpful features, and a wealth of resources, including free workshops, videos, podcasts, articles, guides, a book, and award-winning customer support. All designed to educate and inspire people with a friendly, flexible method that allows them to take total control of their finances (and their future!). Learn more at www.ynab.com.

SOURCE YNAB