While forming good financial habits will help keep your spending in check, there are still forces at large that will foil your best money-saving intentions.
To make things even harder for you to hold onto your money, retailers want you to cave in and make impulse purchases. They even employ clever marketing tactics to entice you to spend money.
Here 8 ways retailers try to get you to buy things — and how you can break the overwhelming urge to overspend.
1. Loss Leaders
Loss leaders are the “too good to be true” items sold at below market price.
The goal with these items is to entice you into the store so you spend money. These are the doorbusters and blue light specials that feel like a steal. So, while you may save on say, ground turkey that’s half off, you may also end up spending $50 on regular-priced products.
How to beat it: Have you ever trekked to the local grocer for some butter, only to find a few untouched sticks hidden in the back of your fridge? To help you figure out what you truly need, shop in your pantry or closet before heading out to the store. This will prevent you from doubling up on supplies you already have. Once you’ve done this, you can write a shopping list. Just make sure you stick to it.
2. The Visceral Experience
Imagine that you arrive at your local supermarket. You smell the aroma of savory ham and cheese croissants wafting through the bakery that’s near the front entrance. When you enter the store, you listen to upbeat pop music playing in the background. And the thoughtfully designed lighting makes every product on the neatly lined shelves look fabulous.
Like an alluring enchantress, the tactile, visceral experience of shopping is so enjoyable that it makes you want to hang out in the store for longer periods of time — and, of course, you end up spending more money.
How to beat it: It’s hard not to be engrossed in a miasma of touch, smell, and sounds. The experience of shopping can provide a form of escape.
It’s also hard not to go grocery shopping, especially when you need food items. So, try picturing products on a messy shelf. If placed in a less-than-picturesque setting, do you still want to linger and shop?
3. Items Placed Next to Each Other
Curated product placement is a clever consumer psychology ploy to get you to spend more money. That’s why when you head to the chips aisle, you’ll find jars of salsa and nacho cheese stacked beside them.
How to beat it: Spend only if you really want the items, and if you can afford them. You can also track your expenses with a money saving app to see how much you have left in your monthly budget for food, clothing, or personal items.
4. Retail Therapy Is Alive and Well
There’s good reason why we enjoy shopping. Whether you’re bored, stressed, anxious, or depressed, it turns out that shopping can help you feel in control of your environment, and thus reduce residual sadness, according to the Journal of Consumer Psychology.
How to beat it: I’m guilty of shopping when I’m feeling bored or stressed. But I also know that it’s better to find other ways to alleviate stress. For instance, take a walk around your neighborhood. Or meditate. Even losing yourself in some binge watching is a better panacea than leisurely shopping, which can be dangerous to your pocketbook.
You’ve probably seen “original price” marked next to the discounted price at chain stores. This is a widely-used tactic called anchoring.
As Emily Guy Birken, a personal finance writer and author of How to End Financial Stress explains, anchoring is a term used in behavioral economics that gives you a price for how much something should cost.
Because you see the suggested retail price of $50, which is the “anchor,” the $30 on the price-tag makes it appear like a good deal. But is it really a deal?
How to break the impulse: Spend some time comparison shopping. Use a handy app to compare prices. Make sure you know whether the reduced price is truly a deal — or if the retailer is merely trying to make you believe it’s a bargain.
6. Removing Friction
Friction refers to barriers that make it more difficult or unpleasant to buy things.
Retailers want it to be as easy and painless for you to spend, either online or in the store. That’s why items you put in your online cart are left in your cart, even after you close the web page and return to it at a later date. This is also why it’s super easy to grab items on the checkout stand.
How to break the impulse: Add friction. Delete saved items in your cart, and before you head to the checkout lines, do a quick inventory of items in your basket to gauge what you really need. The more trouble it takes to buy something, the less inclined you are to make a purchase.
7. The Illusion of a Deal
From BOGOs (buy one, get one free) to bulk discounts, supposed deals actually get you to spend more. Take it from a former deal addict. I used to dump random sundry items into my cart — tubes of toothpaste, trinkets from clearance bins, sheets of stationery and stickers — merely for the thrill of scoring a bargain.
While it didn’t put me in the poorhouse, it didn’t help my financial situation, either. That money I wasted on “bargains” could’ve been put toward a higher-value item that I actually wanted.
How to break the impulse: For non-essentials, keep a 30-day list of things you want that aren’t urgent necessities. You could even challenge yourself to keep your discretionary spending to a minimum at the beginning of the month. This way, by month’s end, you might have more to spend on something you’ve had your eye on.
Also, consider auto-saving for any larger-ticket items. Even $20 a week adds up to $80 a month, or $1,040 a year.
8. Confusing Floor Plans
If you’ve ever stepped foot inside an IKEA or home improvement store, you know how the layout forces to you meander throughout the store. What’s more, it’s often hard to locate what you’re looking for. This forces you to explore and “discover” items you hadn’t even thought of purchasing.
How to break the impulse: While it may be unavoidable, try to stay focused on what you intend to buy, and ignore other products that might catch your eye.
Save More Money
While retailers employ clever tactics so that you’ll spend on impulse, you do have the power to avoid this. By understanding these 8 tactics, you’ll be more apt to keep your hard-earned cash in your bank account.
Are you ready to break the urge to impulse shop?
This page is for informational purposes only. Chime does not provide financial, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for financial, legal or accounting advice. You should consult your own financial, legal and accounting advisors before engaging in any transaction.