We live in a consumer society. We are constantly buying things : we throw ourselves at offers, we renew clothes every little bit, we become obsessed with the new model of a mobile phone, we look for packs and limited editions of our favourite products, we buy new systems and entertainment elements… and often we don’t realise what we spend and how we do it on things we really didn’t need. And sometimes we regret it later. Why do we do it? What drives us to overspend?

In this article we are going to review a series of mental traps that lead us to spend more money , often favored by the marketing departments of companies.

Different mental traps that make us overspend

There are many mental traps that exist to make us overspend. These traps, which we often set ourselves, are taken advantage of by the different advertising strategies of large brands and commercial surfaces. Others, however, do not need to be used: we carry them out ourselves without anyone trying to attract our attention. Below we will see a few of the different mental traps into which most people tend to fall.

1. Sense of reciprocity

The interaction between buyer and seller , especially when the latter makes a supposed concession and/or emotionality is used as an element of persuasion, makes it possible to generate the sensation of needing to correspond to such interaction with greater expense. This is an element widely used in the commercial sector when there is a face-to-face interaction. The idea is to assume that what the other person is doing is trying to advise us as a friend. In this way, the mercantilist background of the interaction is pushed into the background.

2. Desire to be consistent

Another element frequently exploited by the commercial sector is the desire on the part of most people to be consistent with their previous opinions and actions. This type of mental trap is the one that makes us be loyal to a brand despite the fact that there are other alternatives of equal or higher quality and cheaper. It is also used to sell something at a general level so that the person accepts it and then tells him/her the small print (something that many people end up giving in to only because they have already been positively predisposed and so as not to generate a distortion with their previous opinion).

3. The bias of pervasive optimism

Being optimistic is positive in many ways and helps us to face the world with enthusiasm. However, it can lead us to underestimate the risks. In extreme cases, this will lead to the need or economic capacity not being adequately assessed and will lead us to spend more money in a more impulsive and less reflexive way .

4. Celebrations and events

It is common that at big parties and special moments like Christmas we tend to spend more. It is a time when we feel we can afford to make extra expenses and sometimes those expenses exceed the limits of what we had planned. This also extends to days created and prepared by brands and retail outlets to stimulate mass consumption , such as sales or Black Friday.

5. Shopping as a way to escape

Many people resort to shopping as a way to distract themselves and forget their troubles, without actually needing or pretending to buy anything. Also can serve as a way to increase self-esteem in people who have low self-esteem , trying to improve their self-perception through shopping (either by being well cared for by the shop assistants or by buying something that makes them feel better, such as clothes). Although it is something that can occupy their free time, the truth is that it can lead to large expenditures and in some cases can even become compulsive and pathological.

6. Limited availability

The fact that something is apparently temporary and restricted draws attention to it and makes it easier to spend, because otherwise you would be missing an opportunity that may not happen again. This is a frequent commercial strategy to generate a sense of urgency and push for immediate and unreflective purchase. It is a resource used in products of any kind , from food to clothes, including any kind of instrument or tool.

7. Offers and Bargains

Second unit at half price! This and other offers are some of the most common elements and ways to facilitate the purchase of various products, often also as a way to compete with other brands. Being able to take one unit for free, get something extra with your purchase or make a second unit cheaper makes us consider buying and spending money on something we perhaps don’t need or were not looking for.

8. The halo effect

The halo effect is an effect that assumes that in the presence of a positive characteristic in a person, we tend to consider that their other qualities will also be positive. For example, if someone is attractive he will tend to be considered a better person than if he is not. This effect is generally used to talk about how we value other people, but it also applies to products and is used when presenting the product or in advertising campaigns.

9. Credit card use

Studies have shown that we tend to spend much more on credit cards than if we have to pay in cash. Paying in cash forces us to look at the amount we take out and compare it with the amount we have on top. However, when using the card the same thing does not happen: we simply swipe it and enter the PIN. This makes it easier for us to spend more, because the payment is made in a way that is less obvious to our conscience .

10. Mental accounting

Keeping good accounting records of what we earn and what we spend is critical to keeping our money organized and keeping our expenses under control. But at the same time, it means that we do not have any possible extras, and that we do not know exactly what to do with them. The fact is that the origin of the money and the expectation we have of it will make us value it in a different way.

Let’s imagine that we find ourselves 20 euros on the street, or that someone gives us money that we didn’t count on: not having planned it, we won’t have the same level of desire for conservation as we would have for money that we have earned by working. Thus, this can generate that we tend to spend it on whims in an uncontrolled and unthinking way.

11. Fashion and trends

Being fashionable is another of the little mind traps that push us to spend more money than we should. The need to feel appreciated and admired , the need to be on the cutting edge and not get left behind or the need to maintain a sense of belonging to our social group may be some of the reasons behind it.

If our idol and role model wears a certain brand of clothing or cologne, or if it is fashionable to wear an oil-blue suit, it is much easier for us to spend money on these items even if we do not really need the product. We don’t want to be left behind, and that may push some people to buy something to be fashionable.

12. Favorable currency

One aspect that also leads us to spend much more money than we would generally do is only when we travel to other countries that do not have the same currency as us, especially when the local currency is less valuable than our own.

Usually we don’t have the exact change in mind, but the idea that the value of our currency is greater. This means that we have more purchasing power , which in turn makes it easier for us to agree to spend more money by not being very clear about the exact value of money and assuming that what we buy will be relatively cheap. Thus, we buy more than we would generally do. Conversely, a country where our currency has less value than the local one will make us tend to control more how much we spend.

Bibliographic references

  • Cialdini, R. (1983, 1984). Influence. The Psychology of Persuasion. Revised Edition. HarperCollins.
  • McGuire, W.J. (1969). An information-processing model of advertising effectiveness. In H.L. Davis & A.J. Silk (Eds.), Behavioral and Management Sciences in Marketing. New York: Ronald.
  • Thaler, R.H. & Sunstein, C.R. (2008). Nudge: Improving Decisions About Health, Wealth, and Happiness.
  • Wertenbroch, K.; Soma, D. & Chattopadhyay, A. (2007). On the perceiver value of money: the reference dependence of currency numerosity effects. Journal of Consumer Research, 34.