Characteristics of impulsive spenders

A ‘money mindset’ is a way of thinking about personal finance. Your money mindset can change over time, and it may help explain your spending and savings habits. Understanding this can help you build habits and strategies to better manage your money.

If the following applies to you, you might be an impulsive spender:

  • You find it hard to control yourself when you want to buy something, often dipping into money meant for bills or savings.
  • It’s hard to save because you enjoy spending money so much.
  • If you won $1,000, you’d spend it on something fun.
  • If you needed $2,000 for emergency car repairs, you’d have to borrow money or use a credit card. This would cause you mild financial stress.
  • You often feel guilt or regret about your spending habits.

Read about other money mindsets.

About impulsive spenders

Impulsive spenders enjoy the immediate gratification of spending money, and have difficulty saving for bigger goals. They may find themselves dipping into money meant for savings, or even important bills, to pay for entertainment and luxuries.

They’re unlikely to have long-term financial goals. Their impulsive spending is often driven by a desire to reward themselves, enjoy a special experience or relieve boredom. They often use buy now pay later services.

When impulse shoppers receive a financial windfall, like a tax return or bonus, they tend to spend it on leisure or debt repayments rather than saving it. They often feel guilt or regret when they think about the consequences of their spending.

Control your spending

If you identify as an impulsive spender, you need strategies to help you resist the urge to dip into your savings each time you want to buy something.

Think about ways you can make your money harder to get to. For example:

  • Hide your savings account in internet banking so you can’t see the balance when you log in.
  • Choose a trusted person and give your credit card to them, or transfer money to their account.
  • Open a savings account at a different bank.
  • Set up dual signatories so a second person has to sign if you want to withdraw money from your savings.

Use our handy budget planner calculator to determine how much you can spend and save. Impulsive spenders avoid tracking their expenses because they don’t want to face the reality of their spending. However, this is a good way to see exactly where you’re overspending so you can start cutting back. You can use the spending tool in internet banking to track your spending. You can also read our useful guide to sticking to your budget.

When you see a bargain, don’t buy it straight away. Give yourself a few days to think it over first and consider if you really need it. This is especially important right after payday, when you feel cashed up and are more likely to overspend.

If you have a weakness for online shopping, make sure the retailer has a simple returns policy. That way if you regret a purchase, you can send it back.

Make sure you avoid going over your credit card limit. If you’re paying off multiple debts, look into debt consolidation to help you get on top of your repayments.

Set savings goals

Once your spending is under control, it’s time to start building your savings. There are many ways you can do this:

  • Put your savings in a term deposit to make them harder to access. The longer you resist withdrawing money from the term deposit, the more interest you’ll earn.
  • Set up a savings goal in the NAB app so you can watch your progress. Choose something you’d like to achieve in the next six months, like a holiday, car or new clothes, and start putting money towards it. Impulse spenders often become goal-driven savers when they focus on a particular savings goal.
  • Learn how to bucket your money. Set up different accounts for different purposes, and transfer some money from every paycheck to each account. That way you can spend guilt free, knowing you already have money set aside for expenses like bills, food and travel.

Important information

The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, financial and taxation advice before acting on any information in this article.