[Music] I’d like to thank shortform for sponsoring
this video. And I’ll talk more about them later in the video.
For most households, shopping takes up a significant portion of their budget.
And despite the rising popularity of online shopping and e-commerce,
a whopping 65% of Americans still prefer heading to a physical store
to shop. And according to the stats, it seems the in-store shopping experience,
still holds some allure to many that online shopping hasn’t been able to replicate.
While the in-store shopping experience may be excellent, it often leaves us against our
most rational plans, spending more than we intended. It's not unusual for people
to dash into a store with the intention of buying only a few essentials itmes,
and end up about 2 hours later, rolling out a full shopping cart the size of a small dump truck.
And the interesting thing is, this effect is most acquainted with big
department stores that are purposefully designed to display a wide variety of
goods at prices that seem like a steal. This psychological trick
successfully ambushes the unwary customer into spending far more than they intended.
And this is just one of the “questionable” tricks that stores, bars, and restaurants use to lure
you into overspending more than you planned. And if this wasn’t obvious, this is in fact,
a psychological tool that businesses use, which I’ll talk more about later in the video.
You see, the reason why people tend to fall for such insidious manipulation is
the human preference for instant gratification. Overwhelmingly people would prefer having one
marshmallow now than two in the next hour, and retailers know this. That’s why when
you walk into any retail store, they make sure that the aisles are stacked full of
delicious and colourful treats intended to salivate your mouth and tantalize your taste
buds. And of course, as if the sky isn’t blue, most people fall for this trick.
You see, you have to realize that retailers are a bunch of clever folks,
who will use all the tricks in the book to take as much money away from your pockets as possible.
Therefore, every time you walk into a store, keep your eyes open wide,
be very prudent, diligent and exercise strong self-control.
Imagine the shopping mall as a subtle battleground, and your money is the prize,
if you want to come out as the victor, you must have an excellent strategy.
So in order to win this battle, you must know the enemy's tactics. You need to know the plans,
tricks, and strategies they use to entice you into spending over budget or buying more
things than you need. You must understand their effects on you and how they do it. And once you
can spot the tactics, it becomes easier to resist these commercial assaults on your senses. Also,
you'll appreciate the psychology behind spending and saving. Plus, you'll be able
to shop and walk out, with most of your money intact. Leaving you feeling like a champion.
So, next time you walk into a store, use these tips I’m about to share with
you. And if you don't mind, leave a like if you find them helpful.
Number 1 Don't shop with credit cards
In an MIT research finding published in 2001 in Marketing Letters, it revealed
that shoppers spend up to 100% more when they shop with their credit card instead of cash.
Credit cards, when responsibly used, offer you plenty of benefits such as,
travel and cash back point, convenience in the form of not having to carry cash, online shopping,
and so much more. But when it comes to shopping, over-dependence on credit-cards encourages people
to overspend, leaving them in a horrible financial position as the habit persists.
The reason is simple. It's easier to spend more with a credit-card
because the pleasure of the purchase is felt instantly rather than the pain of
handing over your hard-earned cash, which isn't immediately evident as you swipe your card.
Have a look at these stats, according to a report by the Consumer Financial Protection Bureau,
as of 2021, around 42% of Americans carry credit balances of about $5,700,
which is a significant burden on any person.
So to bring this point home, going shopping with only a handful of cash forces you to spend only
that which you have. However, with a credit card, your spending limit may not matter that much.
That being said, credit cards are an incredibly handy tool, in the right hands. For example,
it can provide you with instant money when you desperately need it, it can provide with amazing
rewards and not to mention, it can also help boost your credit score among other benefits.
The point here is, as with any tool, be wise with how you use it.
Number 2 Use newer bills
Next time you go shopping, perhaps you can use this tip. According to a 2012 study in
the Journal of consumer research, people prefer newer crispier notes to shabbier,
jaded bills, meaning they're more inclined to spending the dirtier notes. Participants in
the study spent more money when they had old dollar notes than when they had newer ones.
So next time you go shopping,
leave the jaded bills at home and carry the crisp brand-new notes instead.
Number 3 Listen to music while you shop
Big retailers are adept in the art of turning consumers into spendthrifts.
And one of their more insidious tricks is to play slow music. As you shop,
you unconsciously slow your walking pace to be in tune with slow, soft music. As a result,
you'll see more products and may end up buying more as well.
But, you can liberate yourself from this
particular subtle manipulation by bringing your own music.
Something with a fast tempo delivered through headphones to help you zoom
through the store and out in no time. While sparing your wallet in the process.
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Number 4 Suck on mint while shopping
Sound is not the only sensory weapon retailers employ in their vast arsenal of psychological
tricks. Studies have shown that introducing fragrance into a store increases purchases by 80%.
Retail companies artificially introduce smells to create a more hospitable environment that
encourages visitors to stay – and in the process, open their wallets. Even worse, pumping out a
particular fragrance, say a coffee like smell, increased the sales of the beverage by over 300%.
So next time you’re out shopping, help yourself by sucking on a piece of mint
while doing your business. You see, mint effectively blocks your sense of smell,
and protects you from the scent of attraction – and impulse buying.
Number 5 Think of prices in terms of hours of work put in
This is a neat trick. Next time you go shopping,
you may not think much about dropping $1000 for the latest iPhone until you
reason the number of hours of work you have to put in to earn a thousand bucks.
Say you make $20 an hour, upgrading to the latest iPhone will cost you 50 hours of work and sweat.
When you factor in the time and think about it, it may no longer be such an excellent idea.
When you put on your inner-Econmist lenses and look at your purchases like an economist,
you will see them in a different light and won't readily part with your hard-earned money.
Number 6 Wear high heels when shopping
This one is for the ladies, it may come-off a bit strange,
but it's actually backed by science! Researchers from Brigham Young University,
observed that when women wear high heels when shopping, their mind is focused on
making sure they don’t fall and trip. The result of this is that, when shopping with high heels,
they tend to choose mid-range items instead of costlier or lower-quality ones. They also
observed the same effect in participants after they rode on an elevator or after a yoga class.
Please Note that this strategy may not work as well if you're a man.
Number 7 Avoid Mingling with the store staff
It's human nature to reciprocate kind gestures. The more you joke and laugh with the store staff,
the more likely you are to buy more stuff from them. That’s why most of them are
always smiling at you and eager to help. And being the kind person you are, you won't want
to disappoint such a friendly and helpful person. And inevitably, they end up convincing you to try
out the brand new soap that just came in, which can apparently remove stains 10 times better!
Or maybe the brand new TV that came it, and so on, you get the picture. The point is, next time
they walk up to you, kindly let them know you don’t need their help, unless you actually do.
Number 8 Stop and pause mindfully
You may feel a dopamine rush when you see a coveted item at 85% off. Maybe
it’s those Nike shoes you’ve been dying to have, or perhaps tech gear, a shirt,
or a purse, for exmple… Well I think you get the gist. You see,
our brains are wired to need instant gratification when faced with alluring
merchandise at fantastic prices. We get all gitty and tell ourselves, “I must have it!”
Amidst all that endorphins pouring out in your head,
take time out. Stop and question your decisions. Ask yourself,- how do I feel?,
do I need this now? Does it fit into my budget? Can I wait? Where will I keep it?
After this self-examination, you'll discover that your mindless rush has somewhat slowed,
and you can see the item in a new light. Only then can you make a
rational decision. And if it still makes sense to buy it, go ahead.
Number 9 Don't open a tab
Opening a tab at a bar or restaurant is a license to order drinks and food without
much qualms about the costs. The reason is this:
when you don't pay immediately for a round of drinks, you won't feel any pain,
which makes it easier for you to order the next – and the next – and the next. But once you pay for
that first round, the pain of parting with cash will make you think twice about ordering more.
In conclusion, changing habits may take a lot of time. But small changes consistently followed will
help you drop bad spending habits and pick up good saving habits. You can start with the tips above
to gain more control over your spending habit, and hopefully save towards a better financial future.
Well, guys, thank you so much for watching, have a great day, and I’ll see you in the next one.