Black Friday Meets Behavioral Economics

For two weeks, I’ve been talking about how to use behavioral economics and psychology to get control of your finances.   Now, it’s time to apply it for real, on Black Friday.

This Thanksgiving Weekend, I have a goal: get some damn good deals, and only buy what I want to buy.  Below, I talk about what I’m doing to make this happen, and what you can do yourself.

This weekend, companies are spending tremendous amounts of money on TV ads, mail, radio, online promotions, etc.  With massive research staffs, they’re also using psychological tricks and data mining techniques to target us and push us to buy their products.   A lot of money is on the line for them – last year $52.4 billion was spent on Black Friday weekend, including Cyber-Monday.

Cool.  I’ll take that fantastic sale price, thank you.   But, I’m not going to buy crap that I’ll regret later.  And, I’m not going to go into debt because someone has a slick ad campaign or because there’s only 1 special thingy left that I never wanted anyway. 

Instead, here’s my plan.

First, look at the goal itself.   I’ve started with “I want to buy what I want, at good prices.”  There’s a science behind setting good goals (I’ll talk more about that another time), but, in short, that’s not a great goal.   To make it better, here’s what I need:

  • A clear concrete, goal that I can really commit to.  (See Goal Setting Theory)
  • A step-by-step plan on how to achieve it and overcome obstacles.   (See Implementation Intentions)
  • Each step must be feasible – I must believe that I can actually accomplish it.  (See Self-efficacy)
  • Each step must be readily measurable – so I’ll know if I’ve succeeded or failed, and can adjust as needed (i.e. a Feedback Loop)

So, my new goal is this:  I have a list of the specific people I want to buy stuff for and the stores I plan to go to (online and brick & mortar) in order of priority.  I also have a rough, item-level, budget, which my wife and I have committed to, to know if we’re going off track.  (My wife, by the way, reads these posts. So I can’t say what I’m getting her.  But, think about “Mandible” & Quantified Self).

For some people, I know what to get; for others I don’t.  That’s fine – the item-level budget keeps me from fudging too much.  If something is more than I expect, I’ll adjust – either by getting something else, or by cutting some of the lower priority stuff I’ve planned for myself or for the house.   As I buy things this weekend, I must keep a record, and check it often – mental accounting isn’t enough – that creates my feedback loop. 

Second, let’s look at the shopping environment (see this and this previous post for more info).   I already have the motivation to keep my purchases intentional and targeted; done.   I need to make it EASY to buy the stuff I want, and NOT buy other stuff.   Having my list of specific stores, people and items (when known) immediately at hand helps there.  Listing out the places I should really avoid is even better.  I need to avoid the TRIGGERS that will besiege me (and the rest of America) in a few days.  That means, no “just looking” at the ads in the newspaper, no jumping around online “just to see what’s there”.

Third, let’s look at my own preparation (last week’s post can help).  There is some basic information I need to pull this off.  I need to know what is a good deal.   Tonight, I’ll research how much stores are offering for the things I want, right now (before the sale).    Next, I’ll need to second-guess my intuition.  Our intuitions are being played like a fiddle by the ad campaigns, who know a lot about our shared experiences, cultural references points, and emotional triggers.   Before any big purchase that isn’t on the list, I need to step back, take a breather, and consciously, calmly think about it.    

There’s always more to do, but that’s a good start.  It’s three steps:  1) plan out the financial goal or action 2) structure the environment for success, 3) and prepare yourself to make it happen.

All set.  I hope you are too.

@sawendel

 

  Photos by antwerpenR and lululemonathletica, respectively.