In changing how to think about spending, Henry David Thoreau’s advice to “simplify, simplify, simplify” rings a bell. In order to cut spending, we must determine what is essential—separate out what we truly need from what we just think we need. Studies on consumer behavior offer us three tips to simplify unnecessary spending.
What if you could wait and see if you really do need those shiny new shoes? Well, you can. When I’m tempted to make an impulse purchase, as a rule of thumb, I hold off for a day or too and see if I regret not buying the item the next day. If I forget about the product the next day, then it clearly wasn’t an essential product to buy. Experimental psychologist Ian Zimmerman, Ph.D suggests a way to test if your purchase is impulsive by asking yourself: Was I planning to buy this, or did I just now get the urge to buy it? “If you didn’t plan to buy it, you’re probably experiencing an impulse buying urge,” he says.
Recognize the Lure
Be aware of the lure of brand names—and their corresponding price tags. A recent Psychology Today article argues that the emotions we tie with brand names determine our spending habits more than the actual products behind the labels. When certain labels conjure up emotions, it’s a clue that it might not necessarily be the product itself that is bringing up that imagery, but rather just associations with its label.
Consumers tend more often to evaluate purchases based on their feelings about brands, rather than empirical information about the product. Is it the pleasing design of the bottle that lures you? Compare its ingredients with those of a generic brand with a plainer label. Often they are identical. So if a consumer has a good emotional tie to a certain brand, they are more likely to buy that brand despite its price discrepancy.
Look it up
Researching products will familiarize us more with the product’s quality and content, and thereby gives you a clearer idea of whether the product is an essential purchase, or if you need to simplify more. Getting in the habit of reading previous user reviews on products can keep you from buying something you don’t really need. BJ Fogg, a behavioral psychologist has studied and spoken about how long-term behavior change is systematic and controllable. Tiny habits followed by self-motivation (like giving yourself a compliment) can lead to major behavior change. While this can be applied anywhere in your life, (such as reaching your fitness goals), it can also spawn a habit of being a wary consumer and smart saver. So next time you put down that impulse-purchase urge, give yourself a pat on the back.
[photo courtesy of Rex]