The $100-A-Day-Rule Prevents Impulse Buying

I like stuff – gadgets, gizmos, and thingamajigs. I also like saving money. So, I’ve created the $100-A-Day-Rule.

For every $100 that I want to spend on the purchase of a new product, I must wait one day before I make the purchase. This creates a self-imposed ‘cooling-off’ period.

If a new gadget costs $100, I have to wait one day until I can purchase the gadget.

If a new gizmo costs $400, I have to wait four days until I can purchase the gizmo.

If a new thingamajig costs $1400, I have to wait two weeks until I can purchase the thingamajig.

I tend to live ‘in-the-moment’, which is just a fancy way to say, I like to impulse buy. In the past, when I wanted something, I just went out and bought it. And, in the past, I’d be stuck with payments, long after the desire for the product had gone away. I once purchased a video game console – because a good buddy had one – and I don’t even like video games. I used my credit card, bought the console, played a few games of Madden, and then never touched it again. A $250 gaming console sat, unused, in my entertainment center, for three years.

Now, when I want something, I use the $100-A-Day-Rule. I spend time researching, looking for cheaper alternatives, and deciding if I really want the item.

Since implementing the $100-A-Day-Rule, I have seen a dramatic reduction in the number of things that I actually want to buy. In fact, in most cases, once I leave the store and get home, I forget why I ever wanted a particular item in the first place. But, if I do find that I still want a particular item, I have built-in system which allows me to take time to do some research and find the item at an affordable price.

While I am researching an upcoming purchase, I save my money in my ING DIRECT USA – Orange Savings Account. Transfers to and from my bank are free.

At $100-a-day, it would take about 3 1/2 months to decide on whether or not to purchase a $10,000 automobile. 3 1/2 months is long time to ‘cool off’ from ‘new-car fever’. Imagine if every person, when they went to the lot to purchase a new car, were required to wait 3 1/2 months before they could make a purchase? Might we see some dramatic changes in shopping/buying habits?

Side note: As the numbers move higher and higher, the cooling-off period grows longer and longer. There is a point at which the length of time gets a bit ridiculous – shopping 2.5 years for a $200,000 home might drive anyone crazy. So, I’ve capped my cooling-off period at 6 months. If I want/need an expensive item, and I’ve shopped for it for six months, and if it’s in our budget, I go ahead and purchase it.

Here are a few recent examples of how using the $100-A-Day-Rule worked for me:

Wanted: $500 set of golf clubs. Waited: 5 days, purchased a different set for under $300.

Wanted: $1,400 lawn mower. Waited: 14 days, decided not to purchase but to look for alternatives.

Wanted: $1000 HDTV. Waited: 10 days, decided I needed more information, waited additional 2 months, purchased similar HDTV for under $900.

Wanted: $400 driver to match new clubs. Waited: 4 days, decided that my golf game does not merit the purchase of a $400 driver. Heck, my golf game does not merit the purchase of a $40 driver!

Want: A new laptop. Waiting: 10 days, and counting. I want/need a new laptop, so I am spending some time, looking for a good deal on a new laptop. I can’t decide if I want to spend $400 on a cheap model or $1500 on a better system, so I’m using the higher price as my guide and looking at all options.

Final notes: I have found that the MORE I want an item, the LONGER the cooling off period needs to be. I never want to be in the position where I am making a purchase, based on my emotions. So, if I really, really, really want something, I double the time that I have to wait, and then I make my purchase.

Edit: I want to thank JD over at Get Rich Slowly for sharing the story of Joshua, one of his readers, and how Joshua used this technique to avoid a an impulse purchase.

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44 Responses to The $100-A-Day-Rule Prevents Impulse Buying

  1. Sam says:

    I love this and I’m totally going to be using this system.

    Great idea.

  2. Miranda says:

    What a great system! I like the idea of having to wait before buying something expensive. Especially great: the more expensive it is, the longer you have to wait to buy it. It begs the question: Do you REALLY need/want the item?

  3. Mrs. Micah says:

    Sounds brilliant. I tend to give myself something like a 2 week cool down period for purchases. Works like a charm, sometimes I even forget about them.

  4. Amphritrite says:

    Curious…

    New Clubs: $500 = Five Days.
    After five days, you bought a $300 set… did you have to wait three days more to buy that set?

    :)

  5. El Cheapo says:

    That’s a great rule. I would also add that the ‘cooling off’ period gives you extra time to research better deals on the Internet, search product reviews, apply coupon/bonus codes, and the like. Great stuff!

  6. debtdieter says:

    What a simple yet effective system, I’ll be using this from now on myself!

  7. LOL, I love this idea NCN. I just posted the other day about setting up a “special” savings account to pay for my luxury purchases.

  8. Kristin says:

    NCN…

    Love reading your posts! I love the $100 a day rule. I also have been trying to live by that (but I never named it) by taking more time to think over big purchases. I have always regretted some of the more major impulse purchases I have made so you would have thunk I would’ve learned by that alone. I am working on it! Just glad to know I am not the only one.

    Also wanted to say, check out SlickDeals.net as they list great deals on items and run a lot of good laptop and other computer deals… This is a user forum where consumers post about deals they find on products so sometimes you need to jump quick on the really good ones!

    Anyways… here is a link on a Dell laptop

    http://slickdeals.net/permadeal/12307

  9. Alex says:

    Excellent way to keep your head above debt and keep your hard earned money! Great work!

  10. triple-e says:

    I have a formula for laptops. Visit BestBuy.com. Select under $700 price range. Shop for the ones on sale. Select a model from Dell or Gateway, as I have seen fewer problems with those brands. Compare to deals on the internet. Unless you were going to keep it for 6 or 7 years, you’d be crazy to buy a $1500 laptop, because the $700 will do everything that you are likely to do. You won’t be programming heavy duty system software or anything, but Word and IE will zing on anything these days.

  11. Luke says:

    With some diligence, you can get a new or slightly used driver on Ebay for much less than $400

  12. NoWin says:

    Nifty idea!

  13. I’ve been doing the same thing for a while. It gives you time to try and break away from making an emotional purchase. I would suggest that if your married, you talk it over with your significant other as well.

  14. Maria says:

    This is an excellent idea! Over the course of the year, many would save thousands of dollars. Thanks for sharing your tips.

  15. What a great idea! I love this system and already use a version of it myself – the “bookmark for later” method. I shop primarily online for things other than groceries, and so I jut bookmark the thing. When I clean out my bookmarks each month, if I still want the thing and have been thinking about it all the time, then I’ll get it. Nearly 100% of the time, I don’t.

  16. Great idea! I like how it forces you to wait longer for higher-priced things. I rushed out and bought my laptop when waiting would have really served me better!

  17. madsow says:

    Dude, that’s an awesome way to control yourself and your spending. The wife and I always have a rule that we sleep on any big decision, but I love this idea even better. Thanks!

  18. "Mo" Money says:

    Great tip. It takes the emotion out of your purchase. Another way to control you emotion when you see an item say at Home Depot and want to take it home with you, try walking around the store for awhile, then when you have finished shopping, decide if you still want the item. Most of the time you will decide to put the item back, it doesn’t look as enticing now.

  19. Mary Sue says:

    re the new laptop: check out the Asus EEE PC. I have one and I love it. However, I am not sure of your computing needs (all I needed was something to do some word processing and surf the Interwebs). Liliputing is a good roundup of the new generation of laptops.

  20. Jerry says:

    So do I have to wait 300 days to buy a new car? Because that is a long time!

  21. dafire says:

    300 days is nothing .)

    in eastern germany you waited 10 years for a crap trabant.. that’s what I call a wait :)

  22. NCN says:

    A quick note to all -
    If you reread the post, you’ll note that I cap my waiting period at 6 months.

  23. mic says:

    in addition to thinking about purchases for a period of time, I also have a rule in place which stipulates that in order for me to buy something, some other object in my possession which is not currently being used needs to be sold in order for me to go ahead and buy an object of interest. this way, I keep funds accounted for AND I keep myself in check from accumulating stuff. I have tried to go green the past few years and am in the process of being paperless where I can do so.

  24. Greg says:

    Does the impulse divisor increase with the rate of inflation? If not, how is it adjusted for increasing prices? In 10 years, I could be waiting twice as long to make the same impulse purchase, which seems silly.

  25. Maury says:

    Great idea. I will apply this in smaller increments to extend the wait period. Good stuff.

  26. Paul says:

    Since this idea cost me nothing, I guess I am free to “buy it” without further consideration! This is very well described strategy and I like how you give some examples of how it has worked for you. (I think you dropped a “not” in the description of the $400 driver)

  27. Paul Fortin says:

    This is awesome system and me and my wife are going to do it but what if you are nickel and dming yourself to death. I mean we go to Target as an example for x, y or z and we wind up picking up all kinds of stuff that we also “needed” and maybe some of that was impulse like a candy bar or this and that so that instead of picking up $10 worth of stuff we needed we get $50 of stuff. Is there a kewl thick for that?

  28. Snarla says:

    This is a great idea but for me it’s going to have to be a day for every $10, I’m afraid.

  29. Al says:

    Great idea! I’ve got a few that need years to cool off!

  30. Dave says:

    If this is what you need to do to make intelligent decisions, then good for you. Like many things in life, you have to find a way to accomplish your desires, or deal with what you perceive as a shortcoming in yourself,whether it has to do with weight control, temper/anger management, patience or whatever. For me this would be a ridiculous system. I am generally pretty well informed before I make a purchase and can make that purchase whenever the price is in my opinion a great deal. I don’t need to wait 3 months and then pay twice as much. Also, from personal experience, you may find that you could actually live on and live with very little, such as some missionaries and monk’s, not to mention drug addicts and alchoholics/wino’s. I have known personally someone that lived in a fairly urban environment without indoor plumbing and using an old fashioned wood stove/oven that died with hundreds of thousands in the bank.

  31. I love this idea! It’s so simple too. Thanks for sharing.

  32. Caroline says:

    I like the idea, but I have a question…
    let’s say you want a new 2000 tv, but 10 days into you decide to buy a 900 tv. Do you wait 9 more days?

  33. I love this idea. I’m just like you, I tend to buy things on impulse and then be stuck with the payments. The only thing I did is I started buying things only if I had the cash to pay it at once. But that only started to kill my savings by buying things “because I have the money”. I’m going to try your $100-A-Day-Rule

    Great advice

  34. Kudos to you. I am a personal finance author, and this idea never occured to me. Well, it’ll definitely work for me if I can have the discipline to implement it.

  35. Domestic CFO in Oz says:

    How do you think this works when there are short-term sales on for an item? The “seize the moment” consideration…

    Or does it work by considering that you have already put in the time and research before actually hitting the shops and finding the acceptable price?

    (as someone who’s highly averse to spending time in retail environments, I never look at items without having first considered a need or otherwise for a few weeks or more…)

  36. finance articles says:

    I appreciate the post. Never considered some of these ideas until now. Nice one.

  37. best rate source says:

    Are you still following thru with this, it seems like a great way to curb impulse purchases…personal experience has helped that shopping around can help you make the right purchase, at the right price with less regret down the road.

  38. best rate source says:

    Curious if you are still following thru with this..Its a great strategy to curb impulse buying. Utilizing the extra time to shop around and price compare will pay off in the long run and help to avoid the buyers remorse down the road

  39. Good way to resist impulse buying. Especially for big purchases, it is a good idea to have a cooling off period. Walk away from the shops. Have a think about it, and see whether you feel the same the next week about buying that big purchase.

  40. Good idea indeed. Just make sure you don’t go and impulsively buy tonnes of things for $80 each day ;-)

  41. Mac says:

    Yes defintely works, also with the delay you kind of lose some interest which is good if are about buy some junck, i guess delay gratification is the word.

  42. PROWIDENT says:

    Is it better to crash into a wall at 60 mph or hit 6 at 10 mph?

    Learn economics. There’s no free lunch. Delaying the inevitable always costs more than simply taking the hit.

  43. douglas says:

    Great system,but i was just thinking on taking out my girl to dinner and waiting 48 hours could cost me a lot more than $200
    Lol Thks

  44. Incredible system, i find it quite helpful to manage your personal finance.