5 reasons to stop panic buying

It’s tempting to assume that we are hurtling towards a financial catastrophe, but don’t make it worse by panic buying.

I remember clearly, in those halcyon days of 2020, finally finding toilet paper.

The shelves in stores around me were bare, of course, but I had been looking online, sometimes in unexpected locations. For example, I learned that office supply stores like Staples carried toilet paper (at least in normal times).

In the end, I found it at Walmart, ordered online, and I took it to my partner with the self-parodying bravado of a caveman who was felled a woolly mammoth.

Much has been written about the toilet paper situation at the beginning of the pandemic. It was a classic “tragedy of the commons” situation, in that if we had all just bought toilet paper as normal, we wouldn’t have had any toilet paper shortage. Let that sink in.

If there’s one thing I’ve learned, it’s that we never learn anything. And apparently, I still need to learn that, because I’m astonished to see that we’re about to do all of this over again.

Tariffs are self-defeating

The tariff situation in the U.S., controlled solely by a person with the temperament of a toddler, means that the global economy is starting and stopping over whatever his whims are at the time. The hilarious-if-it-weren’t-so-painful 145% tariffs on Chinese imports (which might as well have been a zillion percent if you think about it) meant that imports stopped, but then started again as the tariff amount was slashed to whatever it is right now.

In short, there’s no use planning for anything, because no one knows what the Toddler-in-Chief will want tomorrow.

That’s why, if you didn’t know, that these tariffs are completely self-defeating. If you want to encourage on-shore production, that’s fine, but being mercurial, corrupt, and unreliable is going to make companies not want to change anything, for fear of being caught flat-footed when the rules change tomorrow.

The only rationalization for the high tariffs is to stroke one man’s ego, or for his pleasure in watching the world burn down.

Why not to panic buy

I’ve been hearing stories about people buying everything from iPhones to cars.

People, please, stop. You are making everything worse.

Buying most things now that you weren’t going to buy, specifically because of the fear of shortages and price hikes, will make things worse for you and for the people around you.

Here are five reasons why:

1. You will make the shortages happen

Remember the toilet paper situation in 2020. That wasn’t caused by the pandemic; that was caused by millions of people just like you feeling scared, and with an irrational urge to stock up on this essential good. People bought more than they needed, and supplies weren’t able to keep up. The more this happened, the more people wanted to buy. It took months to untangle all of that.

If everyone buys things at the same time, the exact same thing will happen.

2. You may help to raise prices

Supply and demand still holds in times of crisis. If you and everyone else buys things outside of normal purchasing habits, there will be less of it, which may lead to the prices spiking. Also, some retailers may intentionally raise prices, either to manage supply, or because taking advantage of scared consumers is a great profit strategy.

3. You may not be saving any money

Let’s say that you are an iPhone user, and you are scared that the price of iPhones is going to go up. Your current phone is two years old, and you decide to panic buy a new one.

An average new iPhone is around $800, so you spend that today. In normal times, you would have waited two more years to buy.

Now let’s say that the worst case comes to pass and the cost of a new iPhone becomes $1500.

• If you panic bought and then replace your phone four years later, in five years you will have spent $2300 on iPhones.
• If you hadn’t panic bought, and replaced your phone two years from now, in five years you will have spent $1500.

In almost every case, buying something sooner than you would ordinarily will cause you to spend more than you would have otherwise. Panic buying is not saving you money.

4. It may be better to hold on to your money

In times of crisis, what do you want to have more, a bunch of stuff, or money?

Growing up, I was told that I should have a credit card for “emergencies”. But emergencies are the worst time to have debt!

To misquote the great Jamie Zawinsky: When confronted with a problem, you think, “I know, I’ll use [a credit card].” Now you have two problems.

Rather than blow your budget (or your savings) to buy things you weren’t planning on buying, perhaps hold on to your cash so that if things really get bad, you’ve got options.

Because, when it comes down to it, that is one of the true values of money: it gives you more options.

5. Nothing might happen

We don’t know what’s going to happen. It’s probably going to be bad, but even if so, we don’t know how bad.

I’ve been reading news articles saying that “empty shelves are coming in a few weeks” for many weeks now. I’m not saying that it won’t happen, only that there isn’t a roadmap for what’s happening.

Has there even been a time when a single person has personally crashed an entire country’s (and perhaps the world’s) economy just for fun? I think not.

But panic buying in uncertain times isn’t a path to success. You might just end up with a whole bunch of stuff, and either drained savings or an overused credit card.

Get what’s important

Now, time will tell if this article ages poorly. (It wouldn’t be the first one.)

And in certain cases, I think it might be beneficial to buy certain items in advance. For example, if you need medications and the supply is uncertain, maybe you try to get your prescription refilled sooner rather than later.

Here’s a list of things we import from China. Maybe if any of these are crucial to you, you buy some of those.

But beyond that, I think the best course of action is to wait out the storm as best as you can. We’re all in for a bumpy ride, and that’s going to be true no matter how much toilet paper you have.