Tuesday, September 14, 2010

Hello World

Hello World

After googling “impulsive buying,” I skip over the Wikipedia link and click on a more a reliable, businessdictioanry.com. This website defined it as “Spur of the moment, unplanned decision to buy, made just before a purchase.” The real take-away from that search was the last part of the definition stating that “usually about 80% of the time) )[it can] lead to problems such as financial difficulties, family disapproval, or feeling of guilt or disappointment.” Sure, impulsive buying might not be as harmful for things like chocolate or Hometown Buffet, but larger purchases can reveal a deeper knowledge about one’s financial stability and spending habits.

After working in retail, I have come to the conclusion that consumers are usually uneducated and frivolous in their decision making. Customers go after the new “hot” or “must have” item without really acknowledging the real reason for that purchase. Everyone and their mother, grandmother and great grandmother wants the IPhone. Do they know how to use it or even turn it on for that matter? You’d be surprised at the questions I get. “Is WebBrowsing the same as email?” I’ve come to the realization that people just buy things for no other reason than maintaining the status quo and to have something to show off to their friends. It is a marker of prestige and one’s ability to make that extravagant purchase at that point in time. It doesn’t matter if you can’t afford it! That’s beside the point…

Time and time again I have witnessed this obsession with material wealth. My most recent job as a sales associate at AT&T qualifies me to analyze the actions made by most consumers. People, unable to pay the past due balances on their account have it set in their mind they must purchase top of the line PDA phones, at any cost. Most people living paycheck to paycheck insist on having these items as well. This is evident to me when I hear I have to wait a week because “they don’t get paid until next Friday…” (Most people find no shame in telling me this). I feel like a marriage counselor when couples argue (in front of me) that they can't afford this, OH WAIT, yes they can, they just have to wait for their checks to clear. Now you might be skeptical and wonder if a phone is really an impulse buy , and I would say DEFINITELY YES!

Many of my customers are pulled in by a “sales greet” and then convinced to buy a phone. You would think that something as serious as a cell phone, binding you into a two year contract would warrant someone to think twice. I would then urge you to spend a few hours in my store and you will change your mind set.

Impulsive buying and consumer behavior is a topic that I’ve always thought about passionately in my head, but I’ve never actually sat down and organized my thoughts. Through this blog I hope to answer the question of WHY? WHY do people purchase things they know they cannot afford? It blows my mind and I don’t think I will ever find an answer. It’s actually common knowledge that the poor tend to spend their money and the rich tend to invest, which speaks volumes for capitalist society. Please don’t get me wrong and draw the conclusion that I think ‘all spending is bad.” We need “spenders” in our system to make the world go round. But if we brought to light the “not so smart choices” of these spenders, maybe our world would be a better place.

Please join me as I delve into a topic that I know you’ve been guilty of at one point or another. As this blog is a continuous work in process, I hope to touch a nerve with a few readers and together learn how to make better financial decisions. The topic of personal finance is taboo and will undoubtedly make us uncomfortable to talk about it out loud. We will not understand the topic or change our circumstances unless we force ourselves to sit down and assess our own financial decisions. So please, if something I say sparks a nerve with you, comment and make your voice heard!

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