Shopping Part 2: Emotions

This is the second post in a three part series about shopping. The first post was about shopping and women

We may like to kid ourselves that we are grown-ups, that we never suffer from a toddler style temper tantrum in the middle of the shops. Well, we may be better at internalising that emotion, but I think that it is definitely still there in all its intense glory.

Oh yes, whether we are happy or unhappy, research shows that we make decisions based on our emotions. Antonio Damasio, a professor of neuroscience, found that people with brain injuries who become unable to perceive or experience emotions also find it hard to make any decisions. They can’t shop.

Cheering ourselves up

Unhappiness can trigger shopping. 79% of women in this survey said that they shopped to cheer themselves up. Unfortunately for those of us trying to cut back, it really does work; the nucleus accumbens, which is associated with pleasure and reward, lights up as people consider a purchase. A Harvard study by Dr Jennifer Lerner found that after watching a sad video, people were willing to spend more on items, possible as an attempt to elevate their own self worth. Advertisers have certainly tried to push the notion of purchases making people happier, from Starbucks learning your name to this dubious example (guys...a hoover will NOT make her happy)

Happy Shoppers

Unfortunately, whilst we may be aware that we are ‘vulnerable’ to random shopping when we are feeling a little down, that doesn’t mean you are safe when you are happy! Over half of women shop when they are feeling happy. It seems that purchases can help to neutralise our emotional states. I’ve certainly felt a buzz of tension release from buying something as small as a magazine.

Tricks of the frugal

Are you confused? I’m confused. Well if you really do feel like shopping is a problem, think back the the toddler having a tantrum. The ability to regulate emotions is crucial for our wellbeing. As we grow up (shh don’t laugh), we learn how to cope with overwhelming emotions in more acceptable ways than tantrums. But once you realise that you are using shopping as a coping mechanism, you can detach yourself from the ‘stuff’ you are about to buy and realise that you are just about to have a temper tantrum, or to jump for joy. Both of which would be more constructive if you really don’t need that stuff. Not to mention more fun! AAAAAAAA!

Shopping Part 1: Women

This is the first in a three part series about shopping.

Many personal finance blogs, particularly those written by women, seem to focus on the grip of consumerism, and in particular the temptation to buy clothes, toiletries and makeup in unreasonable quantities. For example, the charming Shopping Detox (which I read almost every day) follows one woman’s journey to stop excessive spending for an entire year(+), and in the Uniform Project a girl ware the same dress every day for a year.

Why is shopping frequently more of a problem for women than men? And why did I delay writing this post in order to browse the following G-I-R-L-I-E websites?

There is no doubt that all women are different, but I think that women:
1) long for beauty in themselves, and;
2) strive to nurture others

Longing for Beauty

Beauty is not a bad thing in itself, the psalmist longs to gaze on the beauty of the Lord, and God clearly delights in the beauty of his creation in Genesis 1. The problem is that as humans we misuse beauty.

Your heart became proud on account of your beauty, and you corrupted your wisdom because of your splendor.
Ezekiel 28v17

I can certainly relate to that corrupted wisdom. I know that I want to save for long term goals, but in the changing rooms when something makes me feel beautiful, it can be really difficult to walk out of the shop without it. Mainly because later I will want to do this.

Sometimes it really helps to acknowledge this problem as something good which came from God, which we have twisted into vanity. It is an affliction which we could so easily blame on media or social pressures, but really it is a problem in our own hearts, and focusing on external factors is never going to sort out the real problem. Most of us are just not influential enough to change our entire environment.

The other beauty-related reason that women spend longer shopping is the sheer complexity of clothes. A man buying a t-shirt only needs to fit two dimensions - width and height. For a woman buying a t-shirt, not only does it need to be the right width at the bust, waist and hip, but those widest/narrowest points have to fall at the correct height, giving five variables to get right. And that is just a t-shirt!

Unfortunately, the extra time women spend fighting to find things that fit means that they have greater sunk costs, so when women find something, anything, that fits, they are likely to buy it in triumph, until they get home to realise they have three grey skirts already.

If you want to improve the nature of your beauty shopping, recognising the “female” attitudes which trigger a spending spree are key. For the first time ever, I recently managed to buy a beautiful dress (which I didn’t really need) in a really good frame of mind. I could afford it, and I was so grateful to God that it was something so pretty, it felt like a real celebration of the good things He has given me. In contrast, I have bought plenty of other items purely for vanity’s sake, thinking only about glorifying myself. Even more depressing are the purchases to ‘cheer myself up’, but we’ll get onto those later in this series.

Nurturing others

In a survey conducted by Professor Karen J. Pine, many women said they go on a spending spree to treat others (75%) or to impress others (52%), despite over a third admitting that they had spend more than they could afford in the last week alone! You can see it in they way that women decorate homes and fuss over crockery where men couldn’t care less; making things nice for the people around us is important.

Much as it is wonderful to take care of others, most of the time your genuine attentive presence is far more valuable than decoration. If people really are simply after your cooking and cleaning skills, may I suggest you find other people to spend time with? Can you visualise what your dad/partner/brother would do if he was also walking past that display of scented candles? Hmm, yes I thought so. Put it back.

Hourly wages and the marginal utility of time

Hourly wages and the marginal utility of time

Don’t fear the title, all will become clear...

Sometimes, we are faced with decisions where we can either save money, or save time. For people who are budget conscious, it is tempting to always choose the cheapest option no matter what. Unfortunately, that frugal focus means that people fail to recognise that they are constrained by time as well as by money. In fact, arguably we are far more constrained by time than money, because we absolutely cannot add an hour to our life, but we certainly may be able to increase our earnings.

Hourly wages

If you ask most people what their hourly wage is, they will reply with the amount their job pays them. If you are paid per year instead of per hour, you may find it useful to calculate your hourly wage based on a normal week’s work as a useful tool when curbing spending, since you can visualise spending decisions in terms of how long it will take you to pay for them. However, this not really the rate you should think about when time is also involved in a decision.

Utility of time

Utility is all about the value/joy you get from something. Your time has a value! Imagine yourself in this scenario:
Your TV has broken and you need to replace it. You can either order one online and it will be delivered to your door, or you can travel to the shop yourself which will take two hours in total. If the online and shop prices were the same, you would obviously choose the delivery option as you will save two hours. If the online price was £200 higher, most people would make the journey as they are willing to ‘exchange’ two hours of time and effort for £200. This means that the utility of their time is somewhere between £0 and £100 an hour. As you think about how much you’d have to save for it to be worth the effort, you start to hone in on how you highly you value your time.

It is interesting to think about how little a saving you would travel for. For me, it’s probably around the £10/hour mark, assuming I’m indifferent to the task itself.

Marginal utility of time

Next, it is worth considering that all hours are not created equally. If I have an entire free weekend, I’d probably make the two hour journey even for a £5 saving, meaning a £2.50 rate. However, if I am working weekends, getting home late, and would have to fetch the TV by cutting into sleep hours, you’d have to offer me a much larger saving, and I might decide that even a £50 saving won’t induce me to give up a precious two hours sleep when I am working lots.

‘Marginal’ just means extra, so if all of my hours are spent working (hello weekend accountancy classes), then the first free hour has a high marginal utility to me, which is why you’d struggle to buy it off me even at a high price. If I finish my studying (which might be true, my results are tomorrow), then I will have an abundance of weekend time, and the marginal utility from that extra hour is much smaller (if I have 30 free hours instead of 29 at the weekend, it doesn’t increase my happiness/sanity as much as the first hour did, so maybe I will go to pick up that TV, even for quite a small saving).

Most resources follow this pattern; the first of anything has a high marginal utility, but as you have more and more, the ‘extra’ value you get is reduced.

Why does this matter?

Most of us are bombarded by choices every day. When we make decisions such as eating out instead of cooking, or buying items without bothering to research cheaper prices, it is tempting to look back on these decisions as wasteful, and regret them. Learning how you truly value your time can help you to build time costs into your decision making process, allow you to see when it is logical to pay more, and to make peace with these decisions.