Psychology of Spending

Do you ever wonder why you left the mall with $500 worth of clothes when you were not planning to get anything or bought one pair of shoes over another? It is not just personal preference. Psychologists have found that there are several forces that govern our consumer behavior and cause us to make decisions that are not necessarily rational or in our best interest. However, understanding why we buy what we buy can help us make better decisions in the future.

Why is it important to make smart shopping decisions? Many people put purchases on their store or credit cards. If you charge too much and are unable to pay off your balance in full, you could wind up with debt that takes years to pay off and costs thousands of dollars in interest charges. Even if you don’t get into debt, overspending can take away from important saving goals, like a down payment for a house, college, or retirement.

This module covers factors that commonly affect the psychology of our spending, including:

  • The role of advertising
  • Keeping up with the Joneses
  • Spending habits
  • Impulse buying
  • Bargain hunting
  • Retail therapy
  • Money as love
  • Worrying about tomorrow, tomorrow

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