Would you pay $300 for a pair of jeans? What if they were by a popular designer and all the rage?
Personally, I couldn’t fathom paying that much for a pair of jeans. But a beautiful pair of shoes or a gorgeous handbag, well…
Or, what about something a bit more mundane like laundry detergent? Which one do you use? (Me: Tide) Why do you prefer your particular brand? (Me: it’s what my mother used when I was growing up).
Just as I do, you have parameters for how much you will pay for the products and services you buy. Also like me, you have brand loyalty as well as preferences of the vendors from whom you buy. On the surface, this may all seem innocent.
But behind every purchase lurks an interesting story about the real reason you buy what you buy, when, why, and from whom.
Sometimes that “story” tells you you absolutely need/ed what you are about to buy or just purchased.
Sometimes that “story” convinces you that you aren’t spending money…you’re really making an investment.
Sometimes that “story” whispers in your ears not so pleasant words such as, “you don’t deserve that;” or “you can’t afford that!” (even though you really can); or, “fill in the blank with something negative.”
And then there are choices, both the choices you make and the choices available to you in the form of options. For the latter, one might even say we have too many. After all, do we really need 32 different types of toothpaste from one manufacturer?! With so many options (of anything), how do we determine what is right for us; what’s the criteria?
No wonder there’s a phenomenon called decision paralysis!
Once you consider the elements of the “story” coupled with the factors that influence your choices, you discover there’s no such thing as an “innocent” purchase.
Traditional economists peg you and me as “rational” buyers. To them, we approach our buying habits, preferences, and choices logically. Ha! (Just take a quick trip down memory lane and think about the purchase decisions you’ve made this week.)
Unlike traditional economists, behavioral economists recognize that our habits, preferences, and choices are steeped in emotion — steeped in unspoken, invisible sentiments that feed our sense of appeal, exclusivity, or sensibilities, just to name a few.
Which is why when you and I talk about money and do the work to become financial stewards, we must expand the dimensions we discuss. Far too often, we talk about money as if it is one dimensional. When in truth, it is a multi-dimensional, abstract, complex, and emotionally-driven utility.
That is why you need to get honest about your behavior with money (in a loving, compassionate way of course!) and become more aware of your unconscious motivations. This is a must if you want to be in the front leading and directing your money, rather than in front being pushed by your money. Same position; different posture; different experiences and outcomes.
p.s. if today’s post piqued your curiosity, you’ll love the free training I have coming your way soon. Keep an eye on your inbox (May 29th), for a video invitation to a special training event on this topic. Not on our mailing list? Click here to join!
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Photo Credit: Flikr, Venture Vancouver
I’ve discussed the topic of emotion and money in my speaking engagements and blog. And just like you, I have a passion for exploring the psychology of money and to empower other to make meaningful financial decisions.
I’ve encourage my audience to use a very simple strategy to learn more about their financial behaviors. Because one they understand their own perspective on money they recognize where they need to make changes.
As with all such discussions, this one depends on your definition of the word “rational”. We tend to think of “rational” qualities as those pertaining principally to cognitive reasoning. which is fine. But there are many other ways of solving complex problems that can work much better than cognitive reasoning (or at least be a large part of the process) in certain very common situations. Take, for example, knowing what to eat or when to sleep. It could be argued – rather cogently – that using “intuition” or “sense of self” as a guide in these circumstances would be very likely more reliable than cognitive reasoning, assuming that “sense of self” was adequately functioning in a person.
I have written an essay on this subject on my website at http;//blochhealing.co.uk/the-rational-person that might interest your readers.
I got the link wrong. Insufficient cognitive reasoning, I suspect! It should read http://blochhealing.co.uk/the-rational-person
@Peter – Many thanks for your comments and for the corrected link!I agree; I believe my readers would find your essay of interest. My big takeaway from it is the connection between “rational” and our own sense of identity. The underbelly of so many of our choices are wrapped into our self-perception, eh?
Again, thanks for commenting, Peter. Please come back and share more (comments and links).