Don't Say, "No!" To Purchases. Do This Instead!
A while back, I went clothes shopping with my wife. I'm not much of a shopper. If I need something, I go in to get what I need, and I leave. I don’t browse the racks looking for the best deals—if it isn’t on my list, I'm good at ignoring it. To be fully transparent, it wasn’t always like this. I am human, and I like buying stuff. Many years ago when I was deep into debt, I would buy all sort of things I didn’t need with money I didn’t have.
I was reminded of my lousy financial past as I took a break from shopping and I waited for my wife. Sarah was in a store that was packed full of people, so I decided to hang out outside. It was a chilly fall day, and I figured I would get some fresh air.
There was a guy outside, mid-thirties taking a cigarette break. He had a few shopping bags that were stuffed full of goods. He was pacing around the front of the store while taking drags off his cigarette. From what I could tell he was waiting for his partner too.
As I stood there, we get to talking a bit, and he says, “I just dropped $150 walking through the FILA store.” I responded, “Just walking through? Did you have plans to buy anything there?” He says, “Nope, and I dropped another $100 at the store before that too and didn’t plan on it!” He then proceeds to tell me that the weekend before he was out shopping for some new Nikes that hit the stores. He said, “Luckily, they were sold out! Between what I spent today and would’ve spent last week it would’ve been my entire $700 paycheck.”
I always find it strange and ironic that I find myself in these conversations. I'm a financial coach; I help people with their finances. I don’t wear a shirt that says, “I can help you with your money problems.” But, I find myself in these conversations, completely unprovoked. Normally, I would offer some basic advice. However, this time I held back. Most people don’t want to be told how to manage their money. But, what I did say is, “These stores are set up for you to spend money. So when you’re bored on a Saturday, and you decide to hit the mall they will get you to spend money that you didn’t plan on spending. Even crazier, they can get you to sign up for a credit card and get you to spend money you don’t even have yet. Pretty amazing, right? They are good!" He responded with, “You know, I never even thought about it that way!” Just like him, most people don’t, and that's what the stores want. That’s great marketing. But, that’s also how you get yourself into financial trouble. Spending more money than you make and going into debt.
So how did I learn to defend against this? First, the best solution is if you’re trying to save money, get out of debt, or resist temptation is to stay out of the stores. Just don’t go shopping. I know that sounds like an easy solution, and it is. Nobody is forcing you to go.
“But, what if I have to go to the store?” If you absolutely must go to the store, then I want you to practice this rule. In Roots of Personal Finance our membership site that has helped people save and pay off millions of dollars, I teach our members to wait 24 hours, and even up to 30 days when considering a purchase. Why? Marketing is really good. Now, what does that mean? Marketers are fantastic at selling their product as a NEED, meaning you can’t live your life without their stuff.
Think of Starbucks, Keurig, Apple, Samsung, Michael Kors, Nike, Coach, any car manufacturer, and even look at credit cards like Visa and MasterCard. Many of us have strong attachments to these brands and their products, and in many cases feel that we can’t live without them.
In most cases, the stuff you think you need is only a WANT. Marketing and advertising are going to tell you different. They use colors, words, smells, sounds, deals and sales, and whatever else they can leverage to get you to buy at that moment. So when you allow your emotions and the urge to buy to die down a bit, it's incredible how much crap you won’t buy. That’s why I have developed the habit of being patient, and I wait to buy things. Waiting is how I defend myself against marketing. Our members have even come up with a funny saying to remind themselves of this lesson: “What would Brad do?”
People who have overspending habits typically have a hard time telling themselves no. To be clear, if you want to be successful with your finances, you must learn and get good at telling yourself no. It's your best defense. But, for beginners, that’s hard. So instead, I suggest you tell yourself to wait 24 hours. Don’t tell yourself no, just tell yourself to wait, and if you still want whatever item it is you were looking at 24 hours later, then buy it with cash. Notice I didn’t say go into debt for it. If you have to go into debt, it means you can’t afford it.
What I've learned from personal experience and coaching people, nine times out of 10, you won't go back to that store the next day because the emotion is gone. You have removed yourself from their marketing trap, and your brain is thinking about other things.
The next time you're in the store, and you see things you want, just wait 24 hours. If you do, you can expect to save hundreds-of-thousands of dollars of wasteful spending. If my shopping buddy would've known the 24-Hour Rule, I can almost bet he would have a few hundred dollars still in his pocket. Give it a try the next time you’re out. Your wallet will thank you!