We’ve all bought something on impulse or because we “had” to have it. Some people shop like that regularly. It’s a hit to your budget and the guilt is tough to live with, but luckily, knowledge is power.
There are psychological factors that drive us to out of control spending. Five of them actually. The good news is, realizing what they are can help you keep your card firmly tucked away.
- Delayed Reward Discounting. If you’ve ever been so hungry that you stop for fast food that you know is bad, you know what this factor is. Basically, it’s settling for a small “now” reward rather than waiting for a bigger one. Psychologist Carla Marie Manly says the key to fighting this is better impulse control and being okay with delaying gratification.
- The Scarcity Principle. You buy something because it could be unavailable soon. (Christmas toys are a great example.) The trick here is the “do I need this exact thing?” question. Chances are the answer is no.
- Sunk Cost Fallacy. This is when you spend money you’ll never get back in any way. A gym membership is the perfect example. We buy one, go to the gym a few times, and then pay as we stop going. It’s the same for a dress you know you’ll never wear. QUit while you’re ahead and don’t spend the money.
- Anchoring. We’ve all done this. You’re shopping for an outfit and you see them on sale. The original price was $100 but the “markdown” is $50. The thing is….was it ever really $100 to begin with? Chances are it wasn’t. But, thinking it’s on sale gets you to overlook the lack of a real deal.
- Social Facilitation. Being around other people can help us achieve better results. When it comes to shopping, it also pushes us to spend more money. An auction is a perfect example. You try and outbid someone for an item you may not really want and are willing to go over budget to do it.