Who's pulling your strings?
One big way to cut down on your spending is to recognize how businesses attempt to manipulate you into spending more. Many "sales" aren't nearly as good a deal as they seem, but they do often prompt people to make unnecessary purchases. (Shutterstock)
Sometimes the key to not spending money is understanding just how much you’re being manipulated into doing so — at least then you have a fighting chance.
Did you know that supermarkets and restaurants use slower music to create a relaxed atmosphere? In the supermarket, this has the effect of slowing the traffic flow so that you end up shopping for longer and spending more.
In a restaurant, you relax, taking more time to eat and drink, which can lead to a bigger bill.
Your ears aren’t the only things being tuned to get you to spend more money. Your nose is another gateway into your wallet. According to the Journal of Consumer Research, in one experiment, the aroma of cookies influenced tightwad women to spend more on clothing.
Even your brain can be co-opted. Yup, all you smart shoppers out there, retailers know how to pull your strings too.
Marketers know that we shrink from buying either the highest- or lowest-priced stuff. We default to the price in the middle. This is called the “compromise effect”; it’s a major predictor of how we buy, and companies rely on it to increase sales of their most-profitable items. That’s why the salesman at the TV store, car store or shoe store steers you toward the most expensive options first. They know you’re not going to buy them, but they want to establish what “high” is so you feel comfortable with their next offering which is more “in the middle.”
Don’t even get me started with “free.” Almost no one can resist the word “FREE!” Even if you’re being encouraged to spend extra money — “buy $50 worth of stuff and get this thing you didn’t really want or need for free” — the carrot being dangled is so persuasive that the free-with-purchase moves you to dig deeper into your wallet.
So what’s a consumer to do? Knowledge is key. If you know that all the stuff layered around the cash register is designed to encourage impulse purchases, you’ll know enough not to touch it. And if you know your senses can be turned against you, you’ll always shop with a list so you can stay on track.
Gail Vaz-Oxlade's latest book, Money Rules, is published by HarperCollins and will make you say, "Really? I didn't know that!" Visit her website at gailvazoxlade.com