Twelve months ago, I had a Freddy Mercury moment. “I want it and I want it now”.
What was the object of my desire? A red leather lounge suite.
It would look perfect in our house, not that there was anything wrong with the lounge suite that we had, but the red leather was divine. It wouldn’t just enhance the room, it would transform it.
We weren’t even looking to buy new furniture, it was one of those moments when you walk past a shop and something grabs your attention, so you go in to have a closer look.
I did all the things that I tell my clients to do when impulse kicks in. Walk away, give yourself time to assess whether this is a Need or Want. What is the opportunity cost of the purchase? Is the purchase worth it in terms of our longer term goals? We looked at the price tag and decided we weren’t prepared to pay that price. So we didn’t buy it.
A couple of weeks later, we were back in the same shopping centre and the lounge suite was still there, not only that, but it was now on sale with a fairly significant price reduction. That alone made it much more appealing, so in we went for another look. The resolve not to buy was waning. Then the salesman told us we could have it now and pay later. That really sealed the deal. The shot of dopamine hit, the thrill of the deal kicked in, and going for a coffee didn’t help, by now I was hooked.
The conversation with my hubby Simon went a bit like this: ‘Honey, as a money mentor are you sure this is a rational decision. ’
To which I replied (probably a little tersely), ‘Of course I am’. All the while knowing I wasn’t. I was letting the justification and rationalisation bias take over.
I continued (in a much gentler tone) ‘It’s interest free and no payments for a year; so we can sit on and enjoy our lovely leather lounge suite for a whole year before we have to worry about paying for it.’ ‘It will look so good in the room’, and so the discussion continued.
Retailers thrive on the buy now pay for it later offers. Our brains love pleasure; being able to use credit separates the pleasure of acquiring something now from the pain of paying for it.
We did buy it and it has met all our expectations, it has transformed the room. It is incredibly comfortable we absolutely love it and there is no way we will part with it now.
But after twelve months of pleasure we have now got to the pain part of paying for it.
I can’t help asking myself “Would we have bought it twelve months ago if we had to pay for it then and there ?” Probably not. But the easy availability of credit and buy now pay later made it too easy.
Our story is a classic example of pleasure now and pain later.
We have paid for the lounge suite and we will continue to enjoy it for many years. But I can’t help feeling a little sad at the thought of our depleted bank account and what else we could have done with the money.
So the next time Freddy Mercury peeks over your should and you are about to have a ‘I want it now’ moment here are a few tips to help you get through it.
- Walk away; don’t buy immediately and give yourself time to let the emotional reaction go and logic to kick in. If it is a big ticket item give yourself at least 24 hours before going back for another look.
- Work out the numbers. There is nothing wrong with interest fee, deferred payment providing you can pay the item off before the interest free period ends
- Look at your financial goals, what impact is this purchase going to have on you achieving your goals
- If you do decide to buy, make sure you put the monthly payment away into a savings account so you have the money tucked away when the payment falls due and you have earned a bit of interest along the way.
- Don’t beat yourself up and feel like a failure if you succumb to temptation. Review the situation and try to identify the emotional trigger, for example were you really happy or feeling down. Once you know what triggers you to spend you will be able to manage the situation better next time.