WITH the holiday season and celebrations happening now
till Chinese New Year 2013, we all have reasons to spend. Retail product
suppliers are taking this opportunity to tempt us with new launches and
festive sales.
Well, how good is your self control? Are you
controlling your urge to buy with the money from your year-end bonus? Or
are you affected by the never-ending stream of news and endless
advertisements promoting new products and fantastic prices? Do you find
it difficult to avoid the temptation?
Triggers that stimulate needs
There's
lots of “noise” around us every day that influences our spending
decision-making process. So, why are we easily swayed by such
temptation; wanting more than necessary? This is because our different
wants and desires are driven by our five senses: what we see, hear,
taste, smell and touch.
Our brain's decision-making process is
directly triggered by what we see or hear and how we feel. If something
stimulates our brain's pleasure centre through these senses, we want as
much of it as we can get. When our emotions are aroused, they often
overwhelm our good sense and we end up making a purchase to maximise the
“good feeling”.
Merchants and advertisers know our human
weaknesses very well. For that reason, I caution you not to be easily
fooled by your own biological triggers that stimulate emotional
spending.
Illusion of basic needs
In reality, there
are many temptations driven by our needs and wants. We must try to
control those temptations, but still maintain a healthy level of
self-esteem.
We have several basic need drivers: survival, fun,
happiness, love, and relationship. Advertisers try to link their
products to these basic needs. We often find it difficult to
differentiate between our basic needs and the wants that are
persuasively substituted via various media. This confusion has a direct
impact on our spending decisions.
Survival is our most basic
need. Besides survival, we need to have a sense of security and to be
physically healthy. Hence, we have biological need that is critical for
our continued existence and physical well-being. We must have social
needs in the form of love, a sense of belonging with people,
relationships by affiliation with and acceptance by others. Some of us
spend money to express our love, affection and friendship to the loved
ones, family and friends.
Self-esteem needs achievement, respect,
approval and recognition from loved ones and people who are important
to us. These are the needs that drive our positive self-esteem,
self-worth or self-image. Without these needs, we may experience
anxiety, depression, stress or helplessness because we will not able to
fulfil our personal potential.
None of us are perfect, and daily
life brings us into constant collision with evidence of our own
incompetence and inadequacies. If we listen to negative feedback and
don't create what psychologist call “positive illusions” our self-esteem
will go through the floor. Sometimes we will use spending as a
mechanism to boost our bruised self-esteem. Does a bad day at the office
seem to always end up with a shopping spree at the mall?
If we
have a better understanding of our basic needs, and avoid the trap of
wants and desires (at least kept to a minimum), we can manage our
spending better. And limit the buildup of debt that we may not be able
to pay off.
Inner voice of needs
We have an “inner
voice”. Sometimes that inner voice can lead us astray. The less skilled
or experienced we are at something, the harder our inner voice works to
convince us that we are brilliant at it. And that's good, up to a point.
When we look to fulfil our needs, we may have a strong tendency to turn
our desires, wants and preferences into self-talk or dogmatic thoughts
of “I should”, “I must”, “I need”, “I want”, “I always”. These
statements overwhelm our otherwise rational spending attitude.
Perhaps
you recall your “inner voice” saying things like: “I always hang out
with my friends at Cooler Bar on Fridays. If I don't, I will feel that
my week is not complete.” or “I need to buy a pair of the top price
FastFeet running shoes for my gym workout; otherwise, my feet will get
sore from running on the treadmill.” Learn to question these dogmatic
statements when you hear your “mischievous inner voice”.
Use the
power of the most successful advertiser to your personal benefit. Don't
“Just do it” when you hear yourself saying statements like: “I need”, “I
always” or “I have to”. Instead of being
misconstrued by your
self-talk, “Think different” and make a decision only based on your
genuine needs.
The need for convenience'
These
days, people seem to be living a hectic lifestyle in an urban city where
time is limited. We have so much to do, yet there's so little time. For
instance, some will spend hours in the office or stuck in traffic, then
end up not spending time to cook dinner. Instead, we have our dinner in
the restaurant or make a call for home delivery.
Some of us are
constantly looking for services or items that can save time, are easy to
use and give us the “convenience” we want. We are willing to pay more
for services that provide convenience including an express service or
online booking. And our credit card provides the convenience for us to
spend, spend and spend.
Anything that provides convenience has
become a “need” for us, to the point that we will spend money to achieve
convenience. In short, we strive for a “lifestyle of convenience” at a
price a symptom of a developed country with constant inflationary
pressure!
Future needs and wants
In the business
world, merchants, service providers and manufacturers who experience
overpricing of resources and high operation costs will pass the higher
costs to us in the form of higher prices. With the depletion of natural
resources, rising labour costs and climate change, we will continually
be paying more in the future for the goods and services that satisfy our
needs and wants.
If you are a smart consumer, you should be in
control of your needs and wants all the time. When you are able to
address some of the psychological root causes of your needs and
unnecessary spending, you will be in a better position and state of mind
to manage your personal finances.
Just spend a moment to reflect
upon some of your past decisions. Very likely, you will notice that
inside you lurks “a mischievous inner voice” that is forever cajoling
you into an inflated sense of your own power.
So, before you
spend your next dollar during the festive holiday, you need to keep
asking questions like an inquisitive five-year old. It is always safer
to make a habit of asking questions over and over again to test your
needs and spending decisions so that you don't have regrets later in
life.
Carol Yip/Thestar
