Science and Shopping: How to Use Psychology to Avoid Overspending

Are you a shopaholic? Try answering these questions:

  • Do you buy on impulse and then think of how you’ll survive later on?
  • Do you spend to fill a void, relieve stress, or forget about your worries?
  • Do you spend a lot of time adding several items that you don’t really need in your online shopping cart?

If these behaviors sound like something you do very often, then you may be guilty of being an excessive shopper. Psychology-related studies reveal that spenders are those who are unable to resist the urge to enjoy, including shopping, even if it means dealing with negative consequences. A series of overspending on shopping can cause your budget to suffer and affect your savings efforts in the long run.

Check out our infographic to learn more about the negative impact of overspending, the importance of understanding spending triggers, and the dangers of not being able to control your spending.

Science and Shopping_How to Use Psychology to Avoid OverspendingWhat Makes People Buy and How Not to Overspend

Shopping triggers are psychological, which means that shopping is your brain’s response to certain feelings or situations around you. If not controlled, shopping triggers can hurt your budget as you spend more than what you can afford.

Check which of these triggers may be causing you to shop excessively, and know the techniques to resist the urge to overspend:

  1. Social Pressure

You may be susceptible to social pressure if you act based on your interactions with the people around you. Have you noticed how people waiting in line or sitting at restaurants try to look at what people are ordering? They think they should try it as well, so they also order that food on top of what they already have in mind. 

Social pressure can also happen when you go out shopping with your friends, and you buy something to match their standard, not yours. So even if you don’t have the budget for a particular brand of clothing or the latest piece of technology, there’s a good chance you’ll buy it because your friends recommended it to you. 

Just being aware of peer or social pressure is a good start to avoid going into a shopping frenzy. This way, you can focus on your end goal, which is not to spend your money on something that you don’t really need.

It will also help to educate yourself about marketing techniques that brands use to make you buy more than what you had initially intended. Tell the salesperson politely that you only came to purchase one item and that you won’t need a second one even if you get it at a lower cost.

  1. Shopping as Therapy

Certain states of mind cause male and female shoppers alike to be in an impulse buying mood, and it’s not only when they’re feeling happy or excited. On the contrary, feelings of boredom, sadness, or anger can make you want to shop more.

Instead of resorting to shopping, channel your stress and other negative emotions toward worthwhile activities that won’t cost you money like going for a walk, listening to music, or even taking a warm shower to uplift your mood.

  1. WTH Effect

Psychologists associate the so-called “what-the-hell” effect when people feel defeated when they commit certain lapses in their self-imposed rule or routine. The feeling of failure tends to cause individuals to continue indulging since they already fell off the wagon anyway.  

This behavior is particularly evident in budgeting. Try recalling an instance when you went over your budget, even just a little. More often than not, the situation may have led you to indulge in spending more or scrap the effort to stick to your budget completely. 

When it comes to shopping, you may justify your spending by thinking that it’s part of the bills that you regularly pay anyway, so you may as well give in to your cravings—whether it’s food, dresses, or other fashionable items.

Fight your urge to spend frequently by using cash more than your credit card. Paying with cash may cause you to think twice since you can see the dwindling balance as you withdraw from your bank account. Additionally, leave your credit card at home, and to make sure that you don’t use it for online transactions, do not save your credit card details on your online shopping accounts.

  1. Holiday Shopping

Special occasions like birthdays, Christmas, and anniversaries can put you in a generous gift-giving mood. If you’re not mindful of how much you’re spending on holiday shopping, you may end up with too many expenses than you can handle when your bills finally arrive.

What you can do is to include a fair amount of budget for buying gifts, and make sure to stick to it. You may also want to consider giving handmade gifts to reduce your expenses—plus, you can customize it based on your style or of the person who’s receiving it. 

  1. The Deceitful Decoy

Shopping always involves making choices. You want to buy whatever costs the least and, at the same time, has the best quality among all the other alternatives in front of you. In psychology marketing, the role of the decoy is to point you to an option that makes you feel like you’re getting more value by buying it even if it’s more than what you need.

Here’s a typical example: when a fast food crew asks you if you would like to upsize your drink. You end up buying the largest drink for a few pesos more because you think it gives you the best value for your money.

Although not all decoys are meant to manipulate your spending habits, it’s best to remain vigilant when you’re shopping. Buying things at the basic level without any upgrades is fine as long as it serves its purpose. Plus, knowing how much a product costs in retail may help you rethink your position so that you can better assess if it’s worth going after the discount.

  1. Saving Through Panic Buying

This one is a common spending trigger. Sales events organized by either online or traditional brick-and-mortar stores typically offer a wide range of promotions—from Buy One, Get One (BOGO) to price markdowns and free shipping. These perceived benefits prompt you to buy because you want to make sure that you get to avail of the discount before time runs out.

What you may be forgetting here, however, is that there are often certain conditions attached to these kinds of offers and promos. For instance, retailers or sellers set a minimum purchase amount before you become eligible to free delivery or a slash in prices. 

You can try reconfiguring your email or mobile settings, so that you’ll receive fewer notifications about flash sales and, consequently, avoid spending big on shopping. Plus, you need to remember that before you even think of saving on purchases, the more important goal is not to spend at all if there’s no need for it.

Shop Without Overspending

Shopping can be fun. It makes you feel happy when you’re able to buy something for your personal consumption, but you should be mindful of keeping your purchases within a healthy level. Otherwise, you may find yourself having difficulty managing your finances and building your savings fund.

For more tips on good financial habits, check out other blogs from Cashalo. At Cashalo, we aim to help you become financially ready at all times. Cashalo is prepared to lend you a hand when you’re in a financial emergency and need cash fast. Download the Cashalo credit finance app to see how it works!