Dubai: Ever had that sinking feeling that comes when we spend money on something we probably shouldn't have? If you weren’t already aware, this feeling of regret or guilt after you overspend is often referred to as ‘buyer’s remorse’.
Despite the initial excitement about having made this splurge, buyer’s remorse may kick in soon after overspending — or committing to spend — a big amount of money. But what if there was a way to replace buyer's remorse with learning to spend better instead?
“If you've made a purchase you now regret, it’s easy to dwell on it. But if you could use that feeling of buyer's remorse to better your spending habits instead, wouldn’t that help? The truth you need to realise is that buyer's remorse is often inevitable,” said Mirin Raul, a financial coach based in Dubai.
If you've made a purchase, you now regret, it’s easy to dwell on it. But if you could use that feeling of buyer's remorse to better your spending habits instead, wouldn’t that help?
Psychology behind ‘buyer's remorse’
”There's an actual science behind the feeling of buyer's remorse. It’s what psychologists refer to as an ‘avoidance motivational system’, which is a tool that helps consumers avoid negative consequences to overspending such as accumulating large amounts of credit card debt.”
Raul, who was previously a university professor teaching psychology and marketing, further explained how the ‘avoidance motivational system’ would ideally encourage you to, say, save up enough money so that you could pay off that credit card charge in full at the end of the month.
“However, there are times when the ‘avoidance motivational system’ is overwhelmed by a second motivational system, the ‘approach system’. This system encourages you to get whatever you think will make you happy at a given moment and maybe make purchases that aren’t financial prudent, leading you to that awful feeling of buyer's remorse,” Raul added.
How to beat ‘buyer’s remorse’?
Spending psychologists widely recommend that the best way to avoid ‘buyer's remorse’ is to understand this science and to take the steps necessary to beat it. This means making a list of your spending priorities and following it, even when you’re tempted to overspend, experts suggest.
For instance, you might decide that your priority is to spend on your home, your second on food, and your third for any miscellaneous supplies or clothing that you might need for the week.
“By keeping your priority expenses at the top of your spending list, you'll increase your odds of resisting that urge to make a splurge that could bust your budget,” said Abu Dhabi-based financial planner Andrea Barber, who also coaches people on money-related issues.
Before heading out to any store, I now make a list of what I want to buy and only buy the items on that list
Avoid buyer's remorse with an ‘all-cash diet’
Barber further explained that often it’s been observed that others avoid buyer's remorse by going on what is commonly referred to as the ‘all-cash diet’.
“With an ‘all-cash diet’, you carry around the amount of cash you've budgeted for the entire week while leaving your credit card at home. This way, even if your brain is wired to compel you to buy something extra, the money in your pocket won't let you,” added Barber.
"Buyer's remorse can leave you with more than a regrettable purchase; it can also lead to spiralling debt and bankruptcy. It can be easy to get swept up in the moment and buy that 'must have' big-ticket item while ignoring future consequences."
How do UAE residents stave off ‘buyer's remorse’?
Ebin Wilson, a lead financial analyst working at a global tech firm in Dubai, confessed that up until recently he would find himself splurging too often, which would end up making him feel guilty when he later realises that he has fallen short of money when it came to important expenses.
“Before heading out to any store, I now make a list of what I want to buy and only buy the items on that list. Whenever I find this to be too much work, I recall the most recent item I regretted buying. Remembering that lousy feeling keeps me in check,” said Wilson.
Shanu Thomas, a corporate lawyer at an Abu Dhabi-based advisory firm, too found herself ridden with guilt way too often in the recent past when overspending using her credit cards.
“I got myself out of that vicious cycle when I made it a habit to first spend time comparing prices before shopping or reading online reviews of an item – which flags not just the positives, but also the negatives,” Thomas added. “I also ensure I talk about any major expenses with my husband.”
I got myself out of that vicious cycle when I made it a habit to first spend time comparing prices before shopping or reading online reviews of an item
Use your ‘buyer's remorse’ to recognise spending traps
Raul further advised that you could use your feelings of buyer's remorse to recognise two key marketing strategies that often lead consumers to overspend in the first place – referred to as the ‘confirmation bias’ and the ‘decoy effect’.
“Confirmation bias, particularly when it comes to overspending money, is a tendency to cherry-pick information that confirms existing beliefs or ideas relating to an item your increasingly tempted to buy, and ignoring everything else about the product,” explained Raul. Here’s an example of this.
Let’s say you are renting an apartment that fits nicely in your budget when you want to own your own home. You are then more likely to believe the ads telling you that owning a home is a good way to build wealth over time, while at the same time you might ignore any benefits related to renting, because you would rather believe the information you're seeing about homeownership.
“You're more likely to experience buyer's remorse if you immediately buy an item — even something as big as a new home — based on this advertising. Resist the urge to purchase something just because you are told it's the best choice. Instead, try to look objectively at your choices and your finances, and keep an open mind to find the best option for you,” added Raul.
How this marketing gimmick triggers ‘buyer’s remorse’
Barber flagged how a marketing gimmick known as the ‘decoy effect’ is a simple yet effective tool that often triggers the risk of a buyer overspending and eventually feeling the remorse associated with it.
“‘Decoy effect’ is when retailers place a lower-priced item next to one that is higher-priced. You see this and you automatically assume that the lower-priced item is a good deal. Unfortunately, this isn't always true. That lower-priced item might still be priced too high, and it might not provide you with any pleasure when you get it home,” added Barber.
“Do your research before entering a store, or stick to your list of items to buy, and you'll lessen your odds of falling victim to the decoy effect. Even better, your risk of buyer's remorse will also drop.”
Do your research before entering a store, or stick to your list of items to buy, and you'll lessen your odds of falling victim to the 'decoy effect'
Bottom line
Also known as buyer's regret or buyer's disappointment, ‘buyer’s remorse’ boils down to a feeling of regret on the realisation that the purchase decision was the wrong one — either because it was an outright mistake or because there's a better option out there.
“Buyer’s remorse can happen the instant you pay for something, or it can creep up on you a little slower and set in a few days (or even years) after you make your purchase. And there’s no set time frame for how long it might last,” added Raul.
“However, by ensuring you, as a customer, have reliable information right when you are set on purchasing a given product, you will not only feel confident in your purchasing decisions, but this action will lead to a decrease in buyer's remorse.”
The adage ‘buyer beware’ is a law principle that reminds people to be smart with their money – to know what you’re getting before you buy. The idea isn’t just for big purchases like a home or a car, it also rings true for any purchase that may prove unnecessary at any later point.
