You’ve heard of retail therapy — the glorious act of shuttling shiny new things through checkouts and shopping carts to brighten your day. But spending your hard-earned money isn’t always a mood-booster. It might feel good at the time but what about when buying something ends up being a bit of a downer?
That’s buyer’s remorse1, and it usually happens when you buy something you don’t really need (or can’t really afford).
We get it, FOMO is real. But avoiding it can go a long way towards improving your financial wellbeing. So, we’re here to fill you in on everything you need to know about buyer’s remorse — including the science behind it, and how to stop it in its tracks.
What is buyer’s remorse, anyway?
A lot of research2 has gone into that feeling of post-purchase dread. It’s even got a fancy name: cognitive dissonance, or the feeling of psychological unease that happens when you’re at odds with your own thoughts.
When it comes to cognitive dissonance in your spending habits, this usually happens when you think you’re making a good purchasing decision, but you end up mulling over all the alternatives and ‘what could have been’ — a little too late.
Usually, there are three main factors that affect how deep your regrets run:
- Effort: How many resources — like time and money — you invested into making your purchasing decision.
- Responsibility: Having no one else to blame for those wayward buys (except maybe some marketers who hooked you in).
- Commitment: The fact that you’re going to have to live with this new-found, possibly not-as-cool-as-you-thought item, for a long time.
You’d think that putting more effort into making an informed decision would make you feel better about your acquisition. Well, not always. The stress of buyer’s remorse is even worse with larger purchases — like homes, cars, and expensive new boots — even if they’re things you need. Why?
Well, research1 shows that your level of involvement in a purchase can amplify your anxiety levels.
The more you have to think and debate about a purchase, the harder your buyer’s remorse is to overcome.
Another factor that influences your remorse is ‘choice stress’. Psychologist Barry Schwartz explained in his 2004 book, The Paradox of Choice, that while “autonomy and freedom of choice are critical to our wellbeing”, having more choices make it harder to know which one is best. Remember that overwhelming feeling while staring at the crammed shelves at the supermarket, agonising over which shampoo to buy and before long 10 minutes has gone by? That choice overload can lead to stronger feelings of regret.
With all these unavoidable factors, the phenomenon can seem relentless. But like any other form of anxiety, understanding the root cause helps to diminish its control.
For those wanting to feel better about their Financial Wellbeing, here’s how to avoid the post-purchase downer…
Buying better: How to avoid buyer’s remorse
Did you just spend six months house hunting, visiting dozens of open homes before sealing the deal, and are now feeling wary? Worried you made the wrong choice? Completely normal. It’s not a strike against your ability to make rational investments, it’s just how our brains are wired.
Of course, this isn’t to say that all your purchasing decisions will be correct. Impulse buying is common, and it often stems from a lack of planning.
To help consumers make better choices, and feel more confident afterwards, you can use this framework from Schwartz3:
- Figure out your goals
- Evaluate the importance of each goal
- Pull together the range of options
- Evaluate how likely each is to meet your goal
- Pick the winning option
- Modify your goals
Now let’s put that into practice. Say you need new running shoes.
- First, you figure out your goals — are you running on bush trails, at the track, or on a treadmill?
- Now, evaluate the importance of each goal. Maybe you’d like to do more than one of the above, but you figure mountain running isn’t high up on your list.
- Then research all the shoes available
- Gauge how well each meets this hierarchy of goals
- Now you’re ready to pick which shoe you want
And if you do make the wrong choice, don’t beat yourself up. Figure out how you can make a better choice next time.
Because, like those shoes, buyer’s remorse won’t last forever.