The Malachi Group

How much did I save?

Here is the scenario.
You just stepped into the department store. You have always wanted a pair of designer jeans. There they are right in front of you. Not only are they staring back at you; they are on sale. Normal price for the jeans - $100. Today and only today those jeans are on sale for $60. What a bargain. Will today be the day you take a pair home? Will you make an instantaneous purchase for your need of gratification?
I can imagine that all sorts of thoughts are running through your head, along with a number of emotions.” It is such a good deal.” “I cannot possibly pass up this opportunity”. “I do not have enough money on me now.” “There is not enough money in my checking to cover the cost of these jeans and all the other things I need to buy.” “Do I have any money in a savings account to buy the jeans?” “Is there room on my credit card to buy these jeans?” “I really need these jeans.” “I deserve to have them.” “They are on sale because I am supposed to have them.” “I would look great in these jeans.” “I will be so much happier if I own these jeans.” “They are so cheap today; maybe I should get two or three pair.” “I have never seen them on sale before. I mean never.” “It must be fate. Why else would I come to this store today?” “This sale is meant for me. I am going to buy a pair, but just one pair so I do not overspend. I am not going to go nuts.”
You find your size and try them on. They look and feel great. That makes the final sale for you. Today is the day. As you head to the cashier, you open your purse and pull out your credit card without any thought about how long it will take to pay off the cost of the jeans. You have not thought about when you can pay for the jeans (credit card) or if you will pay interest on the credit card. It has not crossed your mind about how long it will take to pay off the jeans portion of your credit card balance. You have them and that is the important thing. The cashier even compliments you on saving $40. You think, “It had to be destiny, for me to find this sale today and I saved $40.”
I think almost all of us have gone through a similar experience. But wait; let us look deeper into this purchase. Whenever I save money, I take it to the bank and put it into my account. With this transaction there was no money given to you when you made the purchase. Nothing to take to the bank and deposit.
In actuality, you spent $60 and saved nothing. Your credit card balance went up $60. If you had paid with your debit card, your checking account balance would have gone down $60. The factual truth is you did not save anything, you spent $60. You got something for the $60 but you did not save a penny. The jeans were on sale and with every sale; you have to spend money to buy something. You do not save money.
This is the classic example of how advertisers and marketers work us over to get us to invoke our emotions in making an instant gratification purchase.
Here are some tips to use when you go to the store. If you see something on sale and you immediately think you need it, take time to ponder…
1) Have I planned to purchase this?
2) Will I pay cash or take on more debt?
3) What will happen if I do not buy it?
4) Am I falling into an advertisers trap?
5) Do I want this only because it is on sale?
6) Is this in my “Spending Plan”?

There you have it. A plan to use whenever you are in a store and see something on sale that gets your undivided attention.