Why We Shop:
Understanding the Psychology of Spending
Ever wonder why it is so hard to control spending? There are many factors that loosen our purse strings and open our wallets. Knowing what these forces are and keeping them in mind can help you stay on budget – and out of debt.
Countless dollars are being spent to understand your buying habits and create a psychological connection between you and a product. Advertisers use “psychographics” – the study of lifestyle, ambitions and world-view to help marketers focus in to specific psychological triggers. And once those ads tap a deep psychological level, it becomes difficult to remain rational. You respond without knowing just what you’re responding to.
Shopping as Experience
Shopping is not simply an act of purchasing what you need and then going home. It is entertainment and social involvement. The shopping mall has become “experiential.” They are vast, complex and complete. Studies have shown that most actual purchases occur in the 3rd hour of shopping. Therefore, malls are designed to keep a shopper there for at least that long, with winding architecture, appealing music, and sometimes even adding pleasing aromas.
Popular television shows and movies display images of “the good life,” yet the lifestyle they depict is often way out of line with reality. These projected images deeply influence the way we see our personal level of success. For most people, attempting to keep up with fictional characters and the possessions they have is a recipe for credit card debt.
The Proliferation of Consumer Goods
There is simply so much to buy! Walk into any large children’s toy store and count the types of dolls alone. Or an electronics store – the variety of stereos and DVD players is staggering. Goods and services that used to be luxury items are now more in the financial range of most consumers. This leads to increased spending because everything is “so affordable.”
What is “success”? Walk into a financial institution to request a home loan when you are wearing an expensive watch, designer clothes, and stylish accessories. Walk into the same place wearing rags and see if you get equal treatment. Society defines success by what we look like, how much money we make, and what we own. There is no doubt that we have more clout when we convey an air of “success.” It is not surprising that we are often tempted to buy things that will make us appear wealthier.
Friends and Family
Pressure from friends and family members can be overwhelming. You may feel a strong sense of expectation from them, believing that they deserve to live with certain things and in a particular way. You may not want to disappoint them or cause conflict so you spend to their desires. Saying “no” to the people you love is an extremely difficult thing to do – and many people don’t.
It is easier then ever to borrow money for the things we want but can’t really afford. Go into any department store in America and more than likely you will be asked if you would like to apply for their store credit card – often receiving an instant ten percent discount on all purchases made that day! It is also easier to obtain credit even when you have a “bad” credit history, so people who are already deep in debt can continue to plunge further. Cash advances, “instant checks,” pay-day loans, and high credit limits all contribute to the temptation to overspend.
Tools to Overcome Overspending
There are many techniques to help even the most entrenched spender transform negative habits into positive behavior:
- Avoid the Hot Spots. If you know you can’t go into a store or mall without exiting with an armload of unnecessary objects, don’t go in.
- Use Lay-away, or a store’s “hold” policy. In other words, give yourself time to think before you buy.
- Write a shopping list. Nothing ruins splurging like a little forethought. Make a list of what you need before you leave the house. Buy only what's on the list.
- Splurge ... but economically and consciously. The pleasure of saying "yes" to the urge to splurge is the same, whether you're at the Salvation Army or Saks Fifth Avenue, and the morning after is a lot less painful.
- Count your money. Know how much you're earning and spending. Each dollar represents a portion of your life – you traded your energy for it. Where is it going? Are you getting fulfillment for each dollar spent? Are you spending your energy (money) in ways that support your values?
- Phone a friend. If you're on the verge of splurging, phoning a friend is a good way to purge the urge.
Now you don’t have to wonder why it is so easy for spending to get out of hand. The reasons are many. But by understanding all these factors and working against them, you – not outside forces – can make conscious and sound shopping decisions.