Have you ever set out to “window shop,” only to emerge with a bag full of items you never intended to buy, much less budgeted for? Alternatively, maybe your “retail Achilles’ heel” starts to rear its head when pass a particular store, or starts to feel excitement around a change in the weather or before an upcoming event.
More than likely, you’ll regret the unintentional spending spree, vowing to never again lose control, only to find yourself repeating the mistake down the road. Fear not. There is a way to control budget busters and it all starts with recognizing your spending triggers.
Market researcher The NPD Group recently released findings of the 2011 holiday shopping season. Though women actually proved to be more budget savvy than men when it came to seeking out discounts, comparing prices and researching the best deals, and cutting back on the number of gifts given, they fell short in one area: Self-indulgence.
“They felt more comfortable about rewarding themselves for being so frugal and there were a lot deals that were hard to pass up,” says NPD’s chief industry analyst Marshal Cohen. He also predicts that retailers will continue certain tactics that proved successful this holiday season, including extended hours, weekend sales, double discounts and “indulge yourself” pitches.
How can you resist the urge to splurge? Understand more about what tempting situations cause you to spend, and how to regain your willpower and budget.
Limited Time Offer!
Creating a “sense of urgency” is a proven way to boost sales and increase customer and online traffic in the retail industry. If there’s a particular item on your list that you’ll buy regardless of price, there are times when such offers are a windfall of sorts. However, the message to “act now” works to your disadvantage when it leads to poor purchase decisions and impulse buying.
While the deals may be tempting, remember that you have more control over the outcome when you “stack the deck” in your favor to resist. In a University of Minnesota study called “Spent Resources: Self-Regulatory Resource Availability Affects Impulse Buying,” researchers found that one of the key factors of impulse buying is mood—both while you’re shopping and how you feel post-purchase.
Generally, shopping in a bad mood will leave you more likely to buy on impulse, as you search for a way to lift your spirits, albeit temporarily. Further, a lackluster mood typically correlates with feelings of low strength and willpower, which is another common trigger to unnecessary spending.
Here’s another easy tip: Stay away from temptation! For the same reason you’d steer of a candy store while dieting, don’t even browse when you’re on a budget.
Do You Want to Save An Extra 15%?
When you’re asked about saving an extra percentage off your purchases in a store, just say no. Not only do store credit cards do little to boost your credit score, the interest rates are sky high. (Not to mention, having that available credit line also has a way of rearing its head when later promotions offering additional discounts for cardholders arrive in the mail).
Further, the instant approval nature of store credit cards generates what is called a “hard inquiry” to your credit file. If you apply for too many store cards, even if you’re only applying to get the discount, you can actually lower your credit score.
We’re Open Late!
Retailers open their doors early and close them later in order to win your favor for convenience. While shopping well after the sun has set may seem like a way maximize your time without the interruptions of a blinking Blackberry or screaming child, beware of the phenomenon known as “decision fatigue.” In short, this phenomenon means that by the time you’ve spent an entire day making the simple and tough decisions that life requires, you’ll lose your ability to process rationally.
As a result, your brain is fried and you’ll make careless purchase decisions. Professors at Stanford University demonstrated decision fatigue in action by approaching mall shoppers with a set of arithmetic challenges to solve after they’d spent the day shopping. The researchers found a correlation between the number of choices shoppers had made over the course of the day and a lack of persistence in solving the math problem presented.
In other words, they had lost the willpower to truly put effort into thinking. Once you hit the point of decision fatigue, you’re more likely to settle for one of two extremes: Buying whatever is cheapest or requires the least amount of processing, like items that are suggested to you by a salesperson or merchandised in a close proximity to you. (Hence, “add on” items at the checkout line).
The researchers concluded that “making choices depletes some important psychological resource; the same resource that is needed for self-regulation.” If you have no option but to shop at the end of the day, counteract the phenomenon by writing a list of exactly what you’re at the store for and create it early in the morning, when your mind is fresh. Once you’re in the store, vow not to do any “creative interpreting” of those purchases when your mind has checked out for the day.
Stephanie Taylor Christensen is a former financial services marketer based in Columbus, OH. The founder of Wellness On Less, she also writes on small business, consumer interest, wellness, career and personal finance topics.