The '24-Hour Rule' That Keeps Retirees From Blowing Their Savings on Impulse Buys
Impulse buying — whether it’s on a new pair of shoes, ticket to a show or flight — can take a significant chunk out of your savings. But if you’ve ever been tempted by “limited-time” deals or special discounts, you’re not alone.
Most shoppers (89%) have made some sort of impulse buy, with more than half (54%) spending more than $100 on a whim, according to data from Capital One Shopping. In 2024, the average shopper made impulse buys adding up to $282 each month.
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Falling into this trap regularly can be detrimental for consumers at any age. But those in retirement, who are likely living off savings and income like Social Security instead of a regular paycheck while potentially spending on new hobbies and travel, should be especially careful of developing this habit.
What is the 24-hour rule?
The 24-hour rule initiates guardrails on impulse spending. It requires you to wait a full day before buying non-essential items. The pause causes you to distance yourself from the fear of missing out and urgency that comes with “limited-time” deals and sales.
You can adjust this rule to fit your specific needs. For instance, if you’re traveling and want to pick up a souvenir, you likely don’t have the time to stick to the 24-hour rule. But if you’ve suddenly decided you need to purchase a new sofa or stereo system, sleep on it and decide in the morning whether you still want to make the purchase. That way, you can still enjoy some shopping while protecting your long-term financial security.
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How impulse spending can drain retirement savings
Many retirees are living on a fixed income, and they don’t have the flexibility to work extra hours or pick up a side hustle to make ends meet. That can trigger more investment portfolio withdrawals than you'd like if you don’t have what you need to cover your expenses and you’ve spent too much of your savings.
An impulse purchase may seem small, but those home gadgets, hobby gear, gifts, travel add-ons and wellness products — for instance — accumulate over time. Small treats can turn into monthly habits that can put unnecessary stress on your retirement. Even if you spend $200 per month on impulse spending, that will add up to $2,400 per year. That’s money that could be growing in your retirement account.
How retirees can use the rule without feeling deprived
While the 24-hour rule is designed to protect your finances, you don’t want to feel too restricted. It makes sense that you’d want to spend some of the money you spent so long earning and saving.
But moderation is key, as is determining what works for you. For example, you can establish a mandatory waiting period for all purchases that hit a specific threshold, such as $50 or $100. You can also opt to keep a wish list instead of adding items to your cart. Upon reviewing the wishlist a few days later, you may end up removing some items. You can also create a “fun money” category in your monthly budget so you have room to make non-essential purchases comfortably.