Don’t you love to see things, reduced in price, just when you need or planned to buy them? This is a true bargain.

But what about the stuff you didn’t plan to buy? You know the ones… “It was such a bargain, I couldn’t  pass it up”, “but it was on sale”. I’ve done it more often than I’d care to admit and justified it. I’m sure, many of you have too. We’re lured into the purchase by the sale signs!

However, there is a saying:

“You can’t have too much of what you don’t need”.  In other words if you don’t need it, you probably shouldn’t be buying it, no matter how much of a bargain it is!

This comes into play particularly, when things are on sale. Retailers know that most of us are attracted to bargains; valued items which we see reduced to “sale price”.(That is the price which the retailer knows will get it moving out the door, as fast as possible!) This appeals to our psychological side. We get an extra emotional “hit” when we think we are getting something cheaply. It makes us feel good. For those of us who use shopping or buying “stuff” to fill some unmet emotional need, this is mana from heaven! Not only can we buy it, but maybe we could  buy two (for the price of one!) or buy this AND something else (two hits for our buck!).

You may have an earlier post of mine http://wp.me/pDpjD-10 “Do you REALLY need it or just want it?”, which tackles this issue in more depth. Suffice to say, it is very important that we differentiate between our needs and wants when making buying decisions. I know that I used to buy things and tell myself I “needed” them; the reality was that I just, at that moment, “wanted” them. Sometimes I’d get them home and know almost immediately that I’d never wear that colour, style or whatever! I was purely lured into the purchase by the item being on sale, or just my need to buy something to satisfy some other unmet, often unrecognised, need. The retailer had won again.

So, if you really do NEED something and find it on sale, well done, you’ve truly got a bargain! However, if you have just bought something because it was on sale, you could have saved yourself more money, by simply not buying it!

I’d love to hear your stories about some real and imagined bargains you’ve got, in the comments below.

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Emotional Spending

September 9, 2009

Many of us shop, or spend money, to fulfill emotional needs rather than actual or physical ones. Many times this is unconscious spending.

A colleague alerted me to a new programme on TV1, “Save our Home” and I have just watched the first episode on TVNZ’s “On Demand” service. http://tvnz.co.nz/save-our-home/s2009-e1-video-2961127

The mother/wife, Karen, in this first episode, is a classic example of someone who spends money for emotional reasons, rather than any physical need. She is desperate to keep her  three adult sons living at home with her and her husband, so showers them with money and provides them with 5-star accommodation and service….all rent free, so they will remain living at home! She and her husband Graham, provide  a  great party place for the boys and their friends. They do this despite being at risk of losing their family home as they cannot keep up the mortgage payments.

The family see the way forward as selling their current home and purchasing a smaller one with a correspondingly smaller mortgage.

The presenters, a successful real estate agent Sarah and a financial advisor Hannah, go very thoroughly through the family’s financial situation including getting a realistic valuation on their current property and then showing them the realistic options of what they could buy. The financial advisor prepares a budget which would enable them to stay in their current home; one which necessitates the young men and one of their partners paying board.

By the end of the show, despite the whole family seemingly understanding the need to change how they are spending money, one is left with the feeling that they will indeed lose their home because they will not take the hard decisions and reduce their spending and insist that their sons and the grandmother, who also lives with them, pay their way.

Sarah and Hannah did a great job of showing the hard facts of the situation but I was left with the feeling that they left an enormous piece, and for me the key piece, the emotional side of this situation unresolved. Karen was not going to change her attitudes to money…. or to spoiling her children… without significant emotional and psychological counselling and support. I believe that until she had significant insight into the reasons behind her spending, and gained some clarity about the “money fog” she was operating in, she was powerless to change.

I felt saddened that Karen’s out of control spending was exposed publicly without any obvious emotional support put in place.  A reminder for me that “reality shows” are for entertainment.