René Nourse, CFP®
We all have a certain emotional attachment to our money, which is very logical since we work hard to earn it. Sometimes we don’t always make the best financial decisions with our spending, especially when we are in heightened emotional states. Have you ever drooled over a certain item only to find that when you got it, you quickly felt terrible for the purchase?
You are not alone. Buyer’s remorse is that sense of regret that hits after having made a purchase of an expensive item. It can stem from the fear of having made the wrong choice, guilt over the extravagance, or a lingering suspicion that the salesperson pressured you into something you didn’t really want. Whatever the root cause, buyer’s remorse is a very real psychological phenomenon that we can experience, especially if we’re not using our money wisely.
Before making your next big purchase, consider these 5 tips to avoid the dreaded Buyer’s Remorse:
1. Sleep on it
Making hasty decisions today is the quickest way to regretting the purchase tomorrow. Don’t buy on impulse. If the product is not something you absolutely need today, wait a week before taking any action.
2. Research Prices
Don’t blindly trust the salesperson to give you the best price for your item. Research online and call several sales outlets to determine a fair price for the product or service.
3. Check the Return Policy
Make sure you ask about the return policy before purchasing the item. Stores are not obligated to give you a refund or exchange after you’ve purchased, so do your due diligence prior to any transactions.
4. Make a Pros & Cons List
Make a list of pros and cons about the item and compare it to your need or want. Writing down the points for both the pros and cons will help you be more analytical about your decision, as opposed to emotional.
5. Double-Check Your Mood
Just like it’s a bad idea to go grocery shopping on an empty stomach, it’s also a bad idea to go retail shopping when you are in a funk. Don’t fall into the ‘retail therapy’ trap. Wait to make purchases until you are feeling well and are able to think analytically through the financial decision.
These tips might not always prevent buyer’s remorse, but they will help. Just know that you are one step ahead of the game by being aware of your financial wellbeing and understanding how your emotions play a part in the health of your wealth.