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Retail Therapy: 7 Ways to Take Advantage Thumbnail

Retail Therapy: 7 Ways to Take Advantage


 American society lends itself to impulse shopping. End caps are filled with sale items, convenience items are placed within easy reach, and the “Buy Now” button is hard to resist. Why do we keep falling into these retail therapy traps time and time again?   Brain chemistry plays a big role in our impulse purchases. In this article we'll see why we gravitate towards impulse purchases and how we can keep our budget on track.

It’s 2am and you can’t sleep.  You decide to look for a new pair of shoes on Amazon.  Before you know it, your cart is full of random things you just “have to have.”

It’s been a long day. You decide to stop by the store to grab a couple items for supper on your way home. Then you pass the sale aisle.  The kitchen gadget you’ve seen on TV is ½ off – you don’t need it, but you might as well get it while it’s on sale.

You are reviewing your monthly spending and notice several small purchases from the local convenience store. The purchases seemed small and insignificant at the time, but now it’s added up to $75 and you can’t even remember what you bought.

Do you resonate with any of these stories?  American society lends itself to impulse shopping. End caps are filled with sale items, convenience items are placed within easy reach, and the “Buy Now” button is hard to resist. Why do we keep falling into these traps time and time again?   Brain chemistry plays a big role in our impulse purchases. There’s a reason it’s called “retail therapy” after all!

According to the Cleveland Clinic, “A 2014 study from the Journal of Consumer Psychology found that retail therapy not only makes people happier immediately, but it can also fight lingering sadness. According to the study, sadness is generally associated with a sense that situations are in control of the outcomes in our life, rather than life being in our own hands. The choices and outcomes inherent in the act of shopping can restore a feeling of personal control and autonomy. This is true for residual sadness we may be feeling as well.”1

While it might seem like we need to buy the item to feel happy, science shows otherwise. It’s the thought of possibility that boosts our mood. Along with a sense of control shopping gives us, the anticipation of purchasing something releases dopamine.   Our body starts to release dopamine even before we make a purchase.1

When used responsibly, shopping can actually help us boost our mood. Building a “fun money” section into our budget can help us to spend money wisely while still taking advantage of the mental health benefits impulse purchases can provide.  Unfortunately, our brains are wired to crave dopamine which can lead to overspending and, worse, shopping addiction.  So how can you reap the benefits while avoiding the pitfalls? Here are 7 ways you can enjoy shopping and maintain your budget:

Have a Budget:

It’s difficult to maintain a budget if you don’t implement one to begin with. There are several methods for creating a budget. Some say start with your fixed expenses (car insurance, housing costs, food, etc.), subtract those from your income, and divide the rest into extra categories like coffee runs or eating out.  Others say to start with your income and break it down by percentages to know how much you should be spending (housing 25%, giving 10%, etc.) and then bring your spending in line with that. Whatever way you decide to go, tracking it is key.   A spreadsheet (Excel or Google Sheets, for example) is a cheap option but is not as dynamic. If you want something that really helps you track your spending, we suggest Monarch or YNAB. Both services have a subscription cost, but they have the convenience of an app to track spending on the go.

Reflect and Redirect:

Having a budget is only half the battle. If you never review your spending, you won’t see ways you can save.  Make sure to review your budget each month, with your partner if you have one, and set spending goals for the next month based on the report.  

You’re Not in Trouble:  

We often think of budgets as restrictive, but if you change your mindset, you can see them as freeing.  Now, instead of feeling like you are living paycheck to paycheck, your budget can offer concreate numbers to work with. Having this information gives you the power to say no to things you don’t need while allowing for wiggle room and freedom to spend within your means.  Sticking to your budget doesn’t have to be punitive, it can also be rewarding. One way to do this is to set goals that lead to rewards. Did you successfully stick to your budget last month? Make a goal to save $10 next month and put it towards a large purchase. 

Watch Your Language:

Instead of telling yourself “I can’t afford to eat out,” ask yourself, “Does this fit my priorities?” If you still have room in your eating out budget and, after thinking it through, you still want to spend the money to eat out then do it. If you're over budget and will have to charge it or take funds from another area of your budget, you need to remind yourself of your priorities. Are you trying to get out of debt or save for a new car or put money into a child’s my529? Whatever it is, is eating out a priority?

Keep the Main Thing the Main Thing:

Along with your language, you need to direct your focus. Keep your large goals in front of your eyes. One idea is to write them on a post it and wrap that around your credit card or cash. This means, each time you go to make a purchase, you will see those goals and ask yourself, “Does this fit my priorities?”

Admit You Have a Problem:

Recognizing your weakness is the first step in overcoming it.  Be mindful of your actions and thoughts when you’re at the store. Do you easily stick to a shopping list, or do you often toss in things you didn’t plan on? Can you walk past a sales rack without a second glance, or do you have to stop and look? Mindlessly going through a store is a surefire way to make impulse purchases.

Take a Breath:

If the anticipation of spending is really what gives you the biggest dopamine boost (see this article) then the act of window shopping can get you the benefits of shopping without spending money.  Even putting something in your Amazon cart can give you a boost. So next time you start to click “check out” decide instead to wait a day or two and see if you still want the item.

These steps should help you keep your budget on track while still being able to spend when you would like. Intentionality is the biggest step to spending wisely.  Set up systems that help you to avoid overspending and keep your priorities in mind as you enter the store – whether online or in person. Schedule a call with us today to set up a solid plan that can help you meet your future financial goals.

1. https://health.clevelandclinic.org/retail-therapy-shopping-compulsion

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by GW Financial, Inc. to provide information on a topic that may be of interest. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2023 GW Financial, Inc.