A few weeks ago we talked about the changing relationship between consumption and happiness. To recap: if you cut out purchases that don’t deliver lasting happiness, you save a lot of money and you end up happier. Win-win, right? But it’s much easier said than done.
According to researchers at Stanford Graduate School of Business, your brain is actually working against your valiant efforts to get spending under control. They found that our brains process shopping in two cognitive steps: choosing and buying. Once the brain chooses an item for purchase, it shifts into buying mode. Once you’re in the buying mode, your brain tends to skip the choosing part for the rest of the shopping trip, the vacation, the holiday season, whatever, throwing caution to the winds as it builds what researchers term shopping momentum.
We’d all like to be more mindful shoppers, but it’s tough when you’re programmed to keep on buying. So here are a few pointers on applying the thrifty concept of buying less to your budget this month:
1. Be Indecisive! Take, for instance, the decision to buy a phone. You could walk into an AT&T store today and buy a beautiful new iPhone 4. But don’t be so hasty. You should prolong the amount of time that your brain is in choosing mode. A better choosing process in this scenario would be to walk into AT&T, Verizon, T-Mobile, and Cricket stores to look at multiple phones before buying the iPhone, even if you know that you just have to have an iPhone. Evaluating all of your options will give you time to step back and think about how badly you “need” that iPhone. If you still don’t feel sure, wait a few days, or at least sleep on it. Who knows, you may stumble on a phone that does just what you need for cheaper.
2. Know Your Enemy! Keeping track of your spending over time helps. If you figure out what causes you to shift into buying mode—it could be the second paycheck of the month, the arrival of October’s Vogue or GOLF Magazine, stress, et cetera—you can make a conscious effort to avoid or limit shopping when you know that you’re apt to overspend. If you use HelloWallet, pay attention to your overspending alerts and think about what caused them. You can also look at your unbudgeted expenses each month and see which categories of spending seem to invite shopping momentum—for example, if you go over on clothes every month, maybe you should cut back on visits to the mall to avoid temptation.
3. Don’t Sweat the Small Stuff! Despite what you may have heard, budgets are not made and broken by going to Starbucks and deciding on-the-spot to buy a scone on top of a coffee. They’re blown when you go shopping for clothes and end up spending money on jewelry too. Don’t get distracted by trying to control small things that make you happy. No one changes behavior over the long term if they’re not having fun!
For those of you who love clothes, we’ll have a whole post on controlling that particular shopping momentum soon. In the meantime, what do you think of these ideas? Would they help you spend less? Got any better ideas? Discuss!