Video: Discover how to change your mindset and curb impulse spending on The Brighter Side
“If you want to make someone’s heart race, it only takes 3 little words: sale on now.”
According to behavioural economist Evan Lucas, retailers know this better than anyone. That’s why when you take a peek at an online shop, you’re not only bombarded with flash-sale pop-ups, but you may also consider buying something you didn’t know you wanted. Sales trigger a powerful sense of urgency and scarcity, says Lucas. “We think, ‘If I don’t buy that now, I’ll miss out and I’ll regret it.’ The FOMO can override rational thinking.” Here’s how to ride the wave and stay in control of your spending.
If it's not something you need, it’s not a bargain
The problem is that not every sale is a good deal or on a product we need. “Discounts tap into our desire to win,” says Lucas. “Getting a product at a special price feels like we’ve outsmarted the system. But sometimes the discounted price is not that different from the regular price somewhere else. It might be 40% off but that’s still 60% on.” His advice? Stick to your list and remember that if it’s not something you need, it’s not a bargain.
Avoid the allure of instant gratification
It’s hard to beat the feeling of instant gratification, which is why we keep reaching for small, immediate rewards. It’s a well-studied psychological bias known as hyperbolic discounting. “Our brains are hardwired for short-term rewards, “says Lucas. “Our tendency is to prefer smaller, immediate rewards over larger future ones, like accepting $100 today rather than $200 next year.” Simply being aware of this desire to buy those smaller items and really questioning whether you need it at the time will make you more aware and less likely to succumb.
Start playing the long game with your money
This tendency to favour immediate rewards over future gains can skew spending and investing decisions. To counteract this, first acknowledge the bias and set clear long-term financial goals.
“The vision of the future can keep you focused on what really matters.”
Next, automate your savings. “Taking decision-making out of the equation makes it easier to stick to a financial plan,” says Lucas. By thinking beyond the present and visualising future benefits can ultimately achieve better financial outcomes.
For more money saving tips and support available to help you navigate the rising cost of living, visit our cost of living hub.