How not to overspend this holiday season

By Janice Roberts

splendid-christmas-gifts-489054The practice of paying employees a week before Christmas Day is helpful – or so we think. However, this means that the gap between paydays will be just over five weeks – with January already being a long month for most. Early pay days also encourage overspending.

December is a month in which we’re pressured to buy more than usual by print, online and television ads.  Obviously, one should make a festive season budget – and most people do.  It’s sticking to the budget that is difficult.  One way around this is to leave all credit cards at home and pay cash. Counting those R100 notes makes one more aware of just how much one is paying for an item.

Importantly, shoppers should also be aware of retailers pricing everything in the store just short of a whole number.  We think we won’t be persuaded to buy something just because it’s marked R99 instead of R100 – but we do.  This is called the left digit effect and studies have shown that a R1 difference can turn a customer who is “just browsing” into one that makes a purchase.

If you’re shopping online, beware the “free shipping” offer as it always comes with conditions – like a threshold for purchases. It has been proved that most customers look for more items to buy to qualify for that “free shipping”.

If you’re going to a shopping centre to buy festive goodies, look out for one of the retailers’ favourite practices – putting half-priced goods near the entrance of the store. What usually happens is that consumers pile these items into their trolleys, not recognising that they’ve just been tricked by the “open-the-purse” display.

Ordinary items can also be “dressed up” to make them appear more attractive – which is why stores use tinsel and glitter to sparkle and shine, making even a bottle of shampoo appear exciting.

Significantly, one also finds that there is a lot of walking to do in big shops.  The more customers walk, the more likely they are to see items other than those they are really looking for – and buy them! (Actually we’re exposed to this all year. Just think of the way in which escalators are placed in a large store.  And the positioning of merchandise is a science in itself; stores are not designed to be customer friendly).

Other ways to save money this holiday season include:

  • Leaving children at home – they make you spend at least a third more,
  • Leaving partners at home – they’ll also make you spend more,
  • Not using a shopping trolley unless you really need to.

Finally, it may be a good idea to shop while wearing earplugs!  It has been found that holiday season sounds – such as Christmas carols – make our brains release the feel-good hormone, dopamine, which makes us less rational and more susceptible to impulse buying.

On behalf of the team at MoneyMarketing, I wish you happy – and safe – holidays.

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