The New Year is here and almost everyone has made new resolutions even when their previous year resolutions have not been achieved; I admire this courage.
The very factors that failed you to achieve the previous year’s targets are likely to be the same factors that will impede your ability to fulfill your resolutions for the New Year. Excessive or luxury expenditures, educated, professionals and urban dwellers to spend on luxurious items. Most of the time such people find themselves in a situation where their expenditures threaten to outweigh their incomes.
It is no longer surprising that even impoverished people in developing countries, who cannot afford food and shelter on a daily basis, are willing to pay a premium for branded and expensive products. This pops out a question; why should people crave for luxuries that even their incomes cannot finance? The answer appears to be to gain social status.
Status is defined as a higher position compared to others on some dimension, for instance academic or athletic skill, physical attractiveness or wealth, which is deemed important by society. Luxury consumption enhances status and produces benefits in social interactions. Therefore the need to enhance status compels people to go for luxuries.
In economics, it has long been recognized that the subjective utility derived from expenditures that deliver no functional benefits may accrue from their merits as signals of social status. The preference for more expensive over cheaper yet functionally equivalent goods has been famously referred to as conspicuous consumption. Psychological research has also confirmed that the desire for status is an important force driving the market for luxury goods.
Another big threat on our incomes is the impulse buying. Impulse purchase or impulse buying is an unplanned decision to buy a product or service, made just before a purchase. One who tends to make such purchases is referred to as an impulse purchaser or impulse buyer. Impulse buying can lead to many buying mistakes. You often buy things you don’t need or things you already have and this leads to needless spending.
In today modern markets, marketers and retailers tend to exploit these impulses which are tied to the basic want for instant gratification. For example, a shopper in a supermarket might not specifically be shopping for confectionary. However, candy, gum, mints and chocolate are prominently displayed at the checkout aisles to trigger impulse buyers to buy what they might not have otherwise considered. This is good for the business but not for the consumer.
Impulse buying can also extend to more expensive items such as automobiles and home appliances. Automobiles in particular are as much an emotional purchase as a rational one. This in turn leads auto dealers all over the world to market their products in a rapid-fire, almost carnival-like manner designed to appeal to emotion over reason.
The bitter fact is that impulse buying disrupts the normal decision making models in consumers’ brains. The logical sequence of the consumers’ actions is replaced with an irrational moment of self gratification. Impulse items appeal to the emotional side of consumers. Some items bought on impulse are not considered functional or necessary in the consumers’ lives.
In this New Year, there is need to avoid impulse buying. Preventing impulse buying involves techniques such as setting budgets before shopping and taking time out before the purchase is made. It is illogical for a consumer to lose his economic temper and begin wasting hard- earned money on things he doesn’t actually need. Sometimes there is need to protect money from its crazy owners. If you can’t really keep your money send it over and I help you.
Today opening a bank account cannot help you keep your money. You open up a savings account (meant to save your money) but the bank issues you an ATM card to enable you access your money any time you want. Is this saving? Banks have reached the extent of installing ATMs near bars to help people access cash and drink themselves silly.
Try to live a disciplined and prudent life for in doing so you eliminate waste and likewise you experience increase by making good use of opportunities when they present themselves. Prudence is a must if you want to stop waste and reckless spending in your life now.