Want to cut down wasteful shopping spends and save money? Here is an interesting no-compromise strategy

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Updated: August 24, 2019 10:28:21 AM

Not all cost-cutting measures need to be harsh. Here’s a rather simple strategy to strike the perfect balance between your money and your requirements.

saving, investing, how to cut down wasteful shopping spends, save money, Marshmallow Test, delayed gratification, Delayed gratification can be an effective strategy to ensure you always strike a balance between your money and your requirements.

Resisting the materialistic lures of the modern world can be a tricky affair. And many among us will admit our uncontrollable spending habits — thanks to the glitzy malls and awesome online shopping portals – have already started impacting our personal finances. The weird irony is we keep succumbing to these ‘unbelievable deals’ (Buy 1 Get 1, Flat 50% off, Rs 2,000 ‘free’ gift when you spend Rs 10,000, so on and so forth) thinking we’re ‘saving money’. Worse is that many of us do realise (at times, secretively) the obvious fallacy of this argument.

And the implications can be problematic. From cramped houses full of unnecessary stuff to enormous credit card bills, avoidable debts and insufficient fund allocation to meet monthly savings, insurance and investment targets are only a few unsettling examples.

It’s also a fact that many among us devise strategies to cut down wasteful spends when we realise our major financial commitments (like rent, food, conveyance, etc.) are getting impacted because of our spending habits. While some start setting budgets for all their expenses, others often take slightly harsher steps like minimising their trips to the mall or even deleting shopping apps on their mobile phones! However, it’s a fact that it’s impossible to plan for all your expenses and not going to malls or deleting apps may not always be a feasible idea. It is in this context our rather interesting suggestion to control shopping expenses becomes extremely relevant. So, read on.

The Marshmallow Test

What if I tell you there’s a simple psychological strategy that you can implement to restrict your unplanned shopping spends? And, to reap its benefits, you don’t even have to stop your trips to the mall or uninstall those shopping apps – but you’ll still ensure you buy things that you need or want while saving a lot of money simultaneously. So, no compromises there.

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But before that let me tell you about an interesting experiment that was conducted by Stanford University psychologist Walter Mischel and Ebbe B. Ebbesen in 1970. The psychologists took a bunch of schoolkids to a room, handed them a marshmallow each, and challenged each child not to eat the treat for 15 minutes. If they succeeded, they were promised they would be given another marshmallow as a gift (and of course those who wouldn’t be able to resist the temptation would not get the extra marshmallow). And while a few kids jumped on to the marshmallow the moment the surveyors left the room, there were quite a few who were able to wait for 15 minutes and ended up getting an extra treat! It was later observed that some of the kids who waited for additional rewards ended up with better life outcomes like higher educational attainment.

Why delayed gratification is an effective cost-cutting strategy

Now, if you’re wondering what this psychological experiment (popularly known as the “Marshmallow Test”) has to do with savings strategies, there’s a major lesson on financial discipline and self-control to be learnt here. The strategy is known as “delayed gratification”. This is how you can implement “delayed gratification” to cut down on wasteful shopping spends without compromising on your requirements.

Next time you go to the mall and spot, say, an amazingly stylish shoe available with a heavy discount, just pause a bit before you get it billed. In fact, don’t buy it that day and go home instead. You might initially find it difficult as thoughts like “I’ll never get a steal like this again”, “I don’t have a shoe of this colour” and “this shoe will work really well with my favourite trousers or dress” may trouble you for some time. Wait for, say, 15 days, and if you still think you need that shoe, head to the mall again and buy it at once. The purchase will surely satisfy you as you thought it through before buying something that you truly wanted to.

But chances are you’ll realise that you actually don’t require that shoe, you were not sure of its fit or colour in any case or maybe the pair you use works just fine. In the process, you will prevent an impulsive purchase and save some money – only when you allow yourself some time to thoroughly scrutinise the merit and utility of the purchase. All this wouldn’t have been possible if you bought it instantly, maybe only to realise later that you made a mistake.

As such, “delayed gratification” can be an effective strategy to ensure you always strike a balance between your money and your requirements, and in turn, keep avoidable debt at bay. And if practiced regularly for the long term, this may help you re-inculcate financial discipline and put you in a better position to deal with bigger financial commitments of the future like arranging for the down payment fund of your home, paying your home loan EMIs, raising a fund for your child’s higher education and wedding and building an adequate retirement fund with the help of savings and smart investments.

And, to top it all, it’s not a harsh financial measure that will depress you making you think you’re not getting to enjoy your hard-earned money. In fact, you’ll still have things you love, but without risking your finances. A perfect win-win situation, isn’t it?

(The author is CEO, BankBazaar.com)

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