Posted on | November 20, 2012 | No Comments
Spending, like most of our actions as humans have strong emotional undertones. We hardly need any motivation to spend. We are already motivated and good to go – shopping makes us happy (and saving makes us sad – delayed gratification). There is always loud whoops of joy anytime I announce to my kids that we are going to the shopping mall. I can get them to do anything in order to be allowed to tag along. There is nothing like “window shopping” in their dictionary. You must buy something. The first thing they reach for as we walk through the doors is the big shopping trolley. As adults, we seem to have the same mentality. Shopping makes us feel real good. We feel so much better, giving our hard earned money away for items that will soon end up in the thrash bin.
Spending decisions are emotionally driven. We spend with our emotions and justify with our minds. Retailers know these facts much better than we do. They understand shopper’s psychology, so they play to our emotions. They make us feel good when we walk in. The aisles are arranged colorfully. There is soft music playing in the background. The items are packaged in attractive colors to stimulate the senses. Appliances look more attractive in catalogs and on store shelves than when we take them home. You begin to wonder if you made a wise decision in spending so much for the item (buyers remorse). An item that goes for N20,000 is labelled N19,900 so that you will feel it is not up to N20,000. Some malls have a children playground in the premises, so that the parents can shop till they drop from exhaustion without distraction from children. The shops are the first in line when it comes to Christmas decorations. They start way back in October. The mall wears a festive look so as to put you in the mood. Joy to the world and goodwill to all store owners. They smile all the way to the bank while shoppers return home to survey the damage they have done to their finances and balance what is left of their accounts.
At this turf, you can hardly win. You are outnumbered. The best way to get back into the game is to get your act together as far as your finances are concerned. You need to change your psychology and mindset to one that is pocket friendly. That means rather than spend first and save what is left if any, you save first and spend what is left. When you get to the point of getting your emotions to buy into your new mindset whereby saving and investing for returns makes you feel real good while spend makes you feel bad (more like robbed), you have your emotions on your side. Shopping now becomes a business like activity. You go in with your shopping list, home in on the right aisle like a guided missile, pick what you want and head straight to the check out. This way, you do not stand the risk of going home with an item you had no plan of buying when you left home. Your shopping activity therefore does not encroach on your financial and investment goals. You shop according to plan, no matter the atmosphere in the store or how steep the price slash. You understand that buying something that is not on your list leaves you with less money in the pocket, no matter how much the price reduction, that you cannot save by spending.
The holiday season is the biggest shopping period in the year. Black Friday, the Friday after Thanksgiving day is the day shops move from red to black – when they make the biggest profit in the year. There is a new one – Cyber Monday. This is the Monday after Black Friday. It is the biggest online shopping day of the year – the online equivalent of Black Friday. It is a season of nostalgia and goose pimples – buy first and think later, wallow in regret as the year turns the last bend, with a new set of New Year Resolutions – a bunch of words on a piece of paper without heart and soul in it.
Are you going to go through the same routine this year? Give in to emotions and regret later, or are you going to plan and stick with your plan? If you don’t know what to do with your money, the store owners will gladly assist. Until you make a shift on the inside, with your emotions lining up with your new direction, you may not go very far down the new road. It all comes down to a matter of choice.
Joy to the world and goodwill to your finances. Compliments of the season.