On the psychology of buying things

In the midst of the economic downturn last year,  Money magazine published a story called, “Cut your spending by $500 a month” in their August edition. Among their tips about saving money were revelations relating to the reasons we buy. I want to share some of those insights with you and others I have learned in my experience with debt and my own spending habits.

  • Look but don’t touch. From Money’s article: “A study by marketing professors Joann Peck (University of Wisconsin– Madison) and Suzanne Shu (UCLA) suggests that when you put your hands on an object – or even stare at it too long in a store window – it increases your psychological sense of ownership.”
  • Make a list. Its easier to stay focused when you shop with a list and you’re less likely to overspend on things you don’t need.
  • Carry cash. You’re more likely to think twice about that purchase when you only have cash on-hand. Cash hurts more to spend than paying by credit.
  • Red, red, everywhere. Take note of many of the stores you shop at that use the color red. It’s not by chance. The color red is a “stimulant” color that wets your appetite. No wonder McD’s, Target and others use it in their identities.
  • Carry a basket around the store. Unless you are grocery shopping or stocking up, it’s easier and more tempting to try and fill up a big shopping cart than it is to fill a small basket.
  • Shop in a good mood. For many, shopping is a big “void filler”. Try and shop when you’re in a better mood. Money: “A study by Harvard management professor Jennifer Lerner has found that people who were feeling depressed when they shopped were willing to spend 30% more than consumers who were in a better frame of mind.”

Keeping these things in mind will help you become a more aware shopper and will help you keep a few more bucks in  your pocket.

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