I was asked for advice in a situation this week that left me asking the question, is there a place for impulse in a frugal life? After all, impulsive behaviour, or living ‘spontaneously’ can carry a pretty negative connotation in the personal finance community. The very thought runs counter to the meticulous calculation and micro management that’s required to create a life of financial freedom, does it not?
First, let’s take a closer look at the word impulse. Here’s a definition:
- The influence of a particular feeling, mental state etc.
– to act under a generous impulse, to strike out at someone from an angry impulse.
2. sudden, involuntary inclination prompting to action:
– to be swayed by impulse.
By definition, the word or associated behaviour isn’t presented in a very positive light!
There are direct references to responses such as uncontrolled anger, and being easily swayed, again in an uncontrolled fashion. Yet, when looking at other words associated with impulse, the following are included:
freedom, life, openness, passion, inspiration, improvisation.
Wow! In my mind, all of those words sound pretty great, and make for a pretty positive visual! I know that I want to experience all of those in my life!
A Tale of Impulsive Behaviour
A friend asked me for some advice this week. She was having serious doubts about the situation she and her husband had gotten themselves into, and with good reason.
Recently, they were feeling the need to replace their vehicle. They have an older model Honda CRV which is on it’s last legs.
They decided to start shopping for a replacement, and visited a couple of car dealerships. Their inclination was to buy something used, as they felt (correctly) that it was the more fiscally responsible option.
On the right track, until…
Off they went to the first dealer, where they found a very nice, used Toyota Rav4. They really liked it, but felt it was a bit pricey considering the age and mileage of the vehicle. It was approximately $15,000, I’m not certain of the mileage.
Regardless, they decided to continue looking. There was another dealership nearby. Inside, they informed the salesman they were looking for a used SUV, however, he seemed more interested in showing them something different. He asked them how much they could afford to pay each month, and assured them he could find them a brand new SUV with the same monthly payment they had budgeted for a used vehicle.
If you’re like me, there are already a few things about this story that are making you cringe. But let’s ignore that for now.
As for my friends, they weren’t yet convinced. That was, until the salesman mentioned that if they purchased a NEW vehicle, they would also get a free trip to Las Vegas!!
This is when things started to unravel.
My client was sold! A trip to Vegas? “Let’s do this!”, was her apparent reaction!
And so, they bought it, on the spot! Well, they signed an offer and put down a $500 deposit. The price? $26,000.00! Over $10,000 more than they had agreed was their budget, before leaving the house THAT MORNING, on a vehicle they had never before considered. Cringe.
The next day, doubt began to creep in. They began to wonder if they had made a hasty decision. The original dealership called to follow up. Over the phone, my colleague mentioned the deposit they had placed on the other vehicle.
Car salesman #1 implored her to cancel, promising that he could definitely make them a better deal. What was her next question? “Are you able to throw in a trip to Vegas? If not, what else are you able to offer to sweeten the deal?” He said that he couldn’t, but that he could include a $500 gas card with the purchase.
Notice what happened here.
My friend totally lost sight of the primary need, a vehicle, and became fixated on a free vacation, which really isn’t free at all. In fact, it would probably turn out to be the most expensive vacation they’ve ever taken. Cringe.
Also, she and her husband are now feeling enormous pressure to make a quick decision. The two competing salespeople applying that pressure could care less about what’s best for their family.
My friend was almost frantic by the time I was presented with her conundrum.
The story has yet to be resolved. For the record, my advice was to pull the plug immediately on both deals, and remove the possibility of a rushed, impulse purchase they would later regret. After all, they were already experiencing buyer’s remorse, and they hadn’t even closed a deal. Knowing my friends, I’m pretty sure they will do just that.
Let’s go back to my original point that this story made me think about. Is there a place for impulse in a frugal life?
In my mind, the answer is yes, and no.
When it comes to both spending and saving money, advanced planning is key. Here’s an example: It’s common knowledge that buying items used, rather than new, is a key principle of frugality. It’s one of the greatest ‘money savers’ there is. But it also takes more effort. It involves identifying needs ahead of time, and taking the time to search a number of sources to find what you need at a great price!
This very practice is designed to not only save money, but also to avoid impulse purchases.
In fact, we strive to eliminate impulse every day. Whether it’s brown-bagging our lunch, creating a budget, or implementing a spending freeze, we are saying no to impulsive behaviour.
The beauty of frugality
To understand where impulse and spontaneity fit in the frugal life, let’s revisit those keywords I mentioned earlier.
freedom, life, openness, passion, inspiration, improvisation.
By embracing a life of frugality, you are able to experience these things so much more! Think about it. If you are free from the constraints placed on you by material things, or excessive debt, you have so much more freedom to enjoy what’s truly important in life.
For example, having more time in your schedule provides the flexibility to accept the often spontaneous invitations from family or friends, whether it’s for visiting, or spending more time outdoors enjoying nature.
That time and freedom also allows you to pursue your other interests outside of work, the things you are truly passionate about! Whether it’s music, travel, or for us bloggers, a side hustle! Maybe it’s volunteer work, or simply being active.
In short, all of the meticulous planning that goes into mastering our money enables us to act on impulse, to live spontaneously in ways that enhance, rather than diminish our lives!
I’d love to hear your thoughts! Is there room for impulse or spontaneity in your world?