I bet if you looked around your house you can find at least one thing you wish you hadn’t bought.
This isn’t uncommon. Many of us make impulse purchases on items we don’t need or want. But did you ever stop to think of why? The answer actually lies in our brains.
Dopamine is a chemical produced by our brain that can have some different effects on our behavior. One of them being impulsive purchases.
Dopamine is part of the brain’s reward system. The mere idea of receiving a discount on something immediately ignites a rush of dopamine into our brains.
In the split second that dopamine releases, we begin to feel a sense of excitement and happiness. So regardless of what we’re buying, the flood of dopamine is causing us to feel excited about buying it.
It works in the opposite way, too. When we’re no longer surprised or excited about something our dopamine levels dwindle down.
Marketers know this. It’s how they plan on getting us to keep buying their products. They know that if we keep seeing the same sales, we will become numb to it.
That’s why companies like Groupon and RetailMeNot flood your inbox with “new” and “exclusive” offers daily. They have to keep the perceived excitement levels up (and equally your dopamine levels up) in order for you to want to buy their product or service.
There are other factors that affect our levels of dopamine, too. One major one is stress. Why do you think you’re more likely to spend money on takeout after a stressful day at work?
When you do something like buy takeout after a stressful day, you feel no guilt. The stress has caused an overload of dopamine to enter your brain, and it’s now affecting the way you make financial decisions.
Imagine the long-term impact this little chemical can have on our finances! I’m going to coin this phenomenon dopamine-induced impulse purchasing, or DIIP.
How to avoid DIIP
So what you do you? No, you can’t cut off your brain’s supply of dopamine.
You wouldn’t want to either. It’s responsible for us feeling joy in other things – not just purchases. Like listening to music.
Here are 4 ways you can avoid DIIP:
1. Unsubscribe to all ‘deals’ websites and emails
This might be hard for you, I get it. Sometimes sites like Groupon have killer deals.
But you have to consider whether it’s a killer deal on something you would have bought anyway or not. You also have to consider if it’s adding to your quality of life.
Once you unsubscribe, only look for coupons when you are about to buy something you need. Make sure you’ve thought about it and it adds to your quality of life.
Here are some resources to help you:
- Unroll.me. This is a great resource for mass-unsubscribing and condensing all other emails you want into one daily email.
- Honey. This little guy will pop up when you’re about to buy something and see if there are any coupon codes. It’s a great browser add-on.
2. Never fall into the time trap
One of the biggest marketing tricks is to put a time limit on how long something is for sale. Stores put products on sale because they want to sell it – not because they want to do you a favor.
Do you think they won’t, at some point, offer the same price on the product again? Sure, there are cases when it is a “once in a lifetime” deal, but that then begs the question why you waited until it was on sale to want to buy it. Do you need it?
The reason there are so many “deals” and “sales” in today’s culture is because there is an over-supply and an under-demand. There is too much “stuff” for us to buy, and not enough of us want it. So marketers try to undercut one another by making you think you’re getting a great deal.
Forget about time-sensitive sales. It’s just a trick to push you to buy something faster.
Instead, force yourself to wait at least another day. Step away from the computer. Get out of the store. Get as far away from the sale as possible.
After waiting, see if the product is still on sale, and if you even still want it. Yeah, you might miss out on the sale, but that just gives you more time to look for a more cost-effective product anyway.
3. Never shop when you’re tired, hungry, or stressed out
These things all affect one another. And they can all trigger a huge rush of dopamine to your brain. Your body might misread these cues and trick your brain into excitement-mode over something you don’t find exciting.
Think of the last time you went shopping when you were hungry. I guarantee you bought at least one or two items that you wouldn’t otherwise buy.
I know I do this all the time. That’s why I always try to eat before I go grocery shopping.
Now think about going shopping for clothes when you’re tired. You will probably pick out an outfit you’ll never wear.
Here’s an embarrassing story for you. I was in a rush to buy some clothes for FinCon this year and went to Banana Republic.
I was exhausted from working all week but needed to get a few things for my trip. I ended up walking out with these horribly ugly skinny suede pants.
Yikes. For those of you that I hung out with at FinCon, just be thankful you didn’t see those bad boys. I never wore them, and in turn have wasted money.
Lastly, think about one of America’s favorite pastimes – Black Friday. You don’t think those people are stressed out?
They’re waiting in line at midnight and pushing each other over for something stupid like an off-brand TV. Damn you, DIIP.
4. Watch your competitive spirit
Even if you’re not a Wantling, you still have the natural human tendency to want to compare yourself to others. This sometimes leaks into in our buying habits.
A rush of excitement or competitiveness may increase your dopamine levels. This can cause you to buy something you otherwise wouldn’t, just to compare yourself to someone else. This happens whether we know it or not.
I recently was in the market for a new computer because the one we own is having some serious issues. The keyboard didn’t work and the screen would constantly go out.
Pressured by societal norms, I came close to pulling the trigger on a new Macbook Pro. When I walked into the Apple store, I saw a bunch of people who looked like they were on spring break.
My competitive nature made me want that too. Luckily I forced myself out of the store to discuss it with my wife.
After a few days the sense came back to me and I realized what a waste of money that would be for someone expecting their first child.
I ended up finding the most cost-effective laptop I could for the money. I then waited until it dropped $100 in price before I bought it.
So the next time you want to be like someone else, have something that other people have, or just compare yourself to others, think again. I’d also suggest checking your intentions the next time you buy something to be sure it’s not for the wrong reasons.
As you can see, dopamine can pretty much wreak havoc on our brains and buying habits if we don’t recognize and control it. Remember, dopamine is good – it’s responsible for nearly everything that brings you joy. But we all know that too much of a good thing can be bad.
Make sure you’re in the right mood and frame of mind before you buy anything. Believe it or not, our brain is forcing us to make stupid buying decisions.
I have one challenge for you. The next time there is something you really want, don’t buy it right away.
Instead, sit down and write out all the pros and cons you can think of in buying it. The write down the reason it adds to your quality of life.
If you can’t get through that task, don’t even think about buying the item. If you can, then read through everything you wrote down and see if it makes sense.
If there are more cons than pros, re-consider buying it. If it doesn’t add to your quality of life, re-consider buying.
But if it makes sense, and you’re checking to make sure you’re not buying it because of DIIP, then go for it. And I want to hear all about it.