Buyer’s Remorse happens to us all. If we can learn to harness it, the end result can be life-altering in terms of money, stress, and so much more. I hope this helps you stave off buyer’s remorse in your own lives. It did for me…
In 2001, at the end of a wonderful semester abroad in Dublin, my new friends and I took a last hurrah vacation to the Canary Islands. Very “spring breaky”. Not for me.
While I was there, I wanted to get gifts for my host family. More specifically, I wanted to get a gift for my 7 year old host brother. He was a truly delightful kid. He played Game Boy and this place had a lot of electronics stores, so it felt like a fit.
Every store I walked into had these “30 games in 1 cartridge” sales. At this time, Spain (of which the Canary Islands are a part) was converting to the Euro but most sales were still in the peseta. So, I did a quick conversion and figured out that this 30-game cartridge was only about $14!
I didn’t have a lot of money left over after studying abroad, but even I couldn’t complain about $14! The kid would think it was “brilliant”. I was as happy as a clam in a mudflat…
Until, that is, while exiting the store, I realized I had made a huge mistake.
I had made that classic accounting error where I misplaced the decimal. This game cartridge had actually cost not $14, but $140! That, I could NOT afford. Sorry kid.
No big deal. I turned right around and went in to exchange it.
Well, it became a big deal when the very same clerk that just sold it to me, feigned that he didn’t remember me, and told me there are no refunds.
That was a sinking feeling.
Long story shorter, I never got my money back. I ended up pestering the guy for a better part of the afternoon until he let me exchange it for a camera which I thought I might need.
Then, I still had to buy the kid a gift. Later, I got him a $35 version of the one I had just bought (at a different store of course).
At the end that exchange, I had a shoddy camera that ended up breaking soon thereafter, a gift I still needed to buy, a wasted afternoon on “vacation”, and a lot of life lessons wrapped into one experience.
Of all the emotions I ran through that day, the most pronounced was this acute understanding of buyer’s remorse. Granted, mine was augmented by my own foolishness, so it was more pronounced. But even sitting here writing this, I can go back and get into that flood of emotions.
And if we extend it to our own lives, buyer’s remorse is an all-too-common phenomenon that we all experience. If we learn to mitigate it, and harness it, the money saving opportunities accumulate and the results can be staggering.
Buyer’s Remorse – Learning From our Past
I’m going to make an outrageous claim, that isn’t true but makes a point. Then, I’ll walk it back a little and try to make a worthwhile point out of it. Here goes.
Outrageous Claim – We experience buyer’s remorse with 100% of the purchases we make.
Now obviously, that’s outrageous. In the end though, maybe we can come away with a claim like this: We experience some degree of buyer’s remorse with a large majority of the purchases we make.
Then, each of us can look into our own lives and see how true that rings. Depending on our answer, we can adjust accordingly and start getting into a saving mindset.
First, what is buyer’s remorse?
My definition is this: The feeling of regret I get for a purchase I have made at ANY time in the past.
Another way of looking at it is by asking yourself “Would I exchange this item back if I could get my money back for it?” If your answer is “yes”, then you have some degree of buyer’s remorse.
Time will be a key element if we’re going to be able to prevent buyer’s remorse and start saving our hard earned money. The ability to look down the road and foresee what will become of this shiny new purchase is crucial. Also, the ability to look down the road and anticipate what will become of the money if I don’t spend it, will also be essential.
For now though, let’s look at how often it comes up.
Doing a little topical sleuthing, it appears that the typical American feels buyer’s remorse on over half of their purchases? This article talks about how we felt remorse on over $74 billion (not million, billion!) worth of items that were on sale for Black Friday alone! Imagine what it is overall?
That is a lot of money that we regret spending. In fact, to put it in perspective, that figure is higher than the GDP (Gross Domestic Product) of over 125 Countries in the world!
Yikes! We may have a slight spending problem on our hands here…
Knowing that makes me more steadfast in my assertion that we can ALL learn from it and make better decisions with our money going forward. There’s no need to beat ourselves up. Clearly, it’s not just us!
It makes sense too. It feels like our whole financial system is based on us making lots of purchases. The advertising industry alone is estimated to be a $300 billion (Again, not million!) dollar industry. That’s a lot of brain power scheming to induce a purchase in the easiest manner possible.
If we’re to resist it, we have to first understand it and recognize the impact it has on our own lives.
Buyer’s Remorse – Learning from our Past
Obviously, items like computers and cars naturally depreciate value over time, so it’s not a completely fair comparison. Most of us need those in our lives these days but even with necessary items we can have buyer’s remorse.
Take a car for example. Did you buy new? Did you opt for the sunroof or the cruise control? Do you have a second car, like a truck, for trips to the dump (I’m guilty of that one. I think I just wanted a truck)? All of those questions above have answers that cost thousands of dollars.
So while having a vehicle might not induce regret, maybe some of the bells and whistles do? Maybe once I forget to close the sun roof and it rains I decide I could have done without it. Or when my once shiny new car is now littered with the detritus of every day life, and gotten it’s first, and tenth scratches, I’d just assume have bought a used car?
Remembering this post I did earlier on being penny wise and pound foolish, we see that those decisions, when coupled with other spending decisions, can add up to life changing amounts of savings.
As always, there’s no judgment here. I’ve fallen victim just as much as the next person. I’m just convinced that I need to get out of the spending cycle. More often than not, I just regret the purchases, resent the clutter, and wish I could sell it for a fraction of the price on Craigslist.
So, how about keeping that sentiment in the forefront of my mind, bypassing the purchase and regret phase, and just keeping the money? I like the sound of that!
If only it were so easy…
So, I say we take an honest look into our past purchases, and try to suss out approximately what percent of past purchases we now find regrettable.
Digging into your past.
Don’t worry, no unearthing of skeletons from our past required!
All I’m talking about is past purchases. And I don’t mean last month.
How about this for a little exercise: Why not log into your Amazon account or your credit card account and go back one year? And again, be honest with yourself. It’s just you and your thoughts. However, if you want, put a regrettable purchase in the comments below. You’ll be in good company.
I’ll start. Here I go…
Okay, I just looked at a credit card from a year ago and two things jump out at me; fast food and toys for my toddler. The fast food is because I was stressed out in my job and trying to cut corners with food. But that month, I had over 15 trips to Dunkin, McDonalds, or Cumberland totaling over $90.
Not only is that incredibly unhealthy, but I’m also just throwing money away. I easily could have spent $20 bucks in groceries on those meals and been healthier for it. Projected over a year that’s $840 in savings on those purchases alone.
The other one is toys for my toddler. He plays with a new toy for 10 minutes sometimes. So, not only is it a lot of money but I also have all this toy clutter in the house just staring at me and filling me with regret. At the very least, I should buy used, but I also want less!
Not even places like Goodwill and Salvation Army want kid’s toys around here. So much of it is just expensive land filler. I’d much rather just get him swimming lessons from here on out.
So, to be honest, I was hoping I would have a cappuccino machine that I haven’t used in 6 months but I didn’t. My more regrettable purchases would probably be deeper in the past before I started seriously thinking about what I bought. Still, seeing a column filled with fast food joints is still eye-opening. Do you have anything like that you’d be willing to share? If so, I want to hear about it.
Now that you’ve dug a little bit into your past purchases, I think it’s worth it to tally up the amount of money you are spending on regrettable purchases. This could include anything from an impulse bag of chips at the grocery store, an outfit that’s already out of style, fast food, unused toys, the blender you don’t use, a third car, or anything in between.
Use it and make an estimate. What is the average total amount per month that you spend regrettably?
Once you know that, it’s time to get time working in your favor.
Leave Buyer’s Remorse Behind and Put Time on Your Side!
If you stop buying making regrettable purchases for a month, that’s good, but it probably won’t amount to much in the long run.
The magic happens over time.
So, let’s look ahead, and see, if we can consistently prevent buyer’s remorse, what that will amount to over time.
In the last section, I asked you to come up with your average monthly amount of money you regret spending.
Mine was about $200 per month. And that’s even at a time when I was already starting to be conscientious with my spending.
So, $200 in savings per month over a year is $2,400. After a 30-year teaching career that would be $72,000. That’s already worth it to me to not have 30 years of fast food in my body and a lot less clutter.
Invested, and assuming an 8% rate of return (which I always do because that is what the market has returned over time) that regrettable money comes to just shy of $295,000 after 30 years. Yes please!
But here’s the thing, I was already getting wise to it at that point. If I could just pluck a typical American out of thin air and have access to their expenses, I honestly think I could save that person over $1,000 per month. I really do.
But to be fair, let’s call it half of that, or $500. Given the astronomical figures in the first section of this post I don’t think that’s too far fetched.
Saving $500 per month and investing it would project out to over $680,000! That’s a hefty price for stuff you don’t even want don’t you think?
I’ll do an article on this later, but if you are intimidated by investing, like so many of us are, how about this strategy: Why don’t you just invest the money you don’t spend on regrettable purchases? That way, if your worst fear is realized, you can always chalk it up to the idea that you would have wasted it anyways? But, if everything continues on as usual, you can reap the rewards!
Summary – Don’t Let Perfect be the Enemy!
If anything should be the enemy here it’s buyer’s remorse. Thousands of dollars, that can eventually mean hundreds of thousands of dollars, get sucked out of our future savings in the form of highly regrettable purchases.
I’m still working on this. 42 years (my age) of commercials and consumerism can’t be undone over night.
One thing that helps me is looking into the crystal ball to see what my purchase will look like over time. Will these $100 jeans get tattered and stained and forgettable just like EVERY OTHER PAIR OF JEANS I’VE EVER OWNED? If my answer is yes (which it is), then maybe a $5 dollar equivalent at Salvation Army is a good option.
Thinking about what will become of a purchase over time and comparing it to the savings I would reap instead is a very powerful mind trick. That trick alone has prevented me from buying so many things.
It’s also drastically dulled the urge to buy things which can be just as difficult.
And as the saying goes, don’t let perfect be the enemy of good.
Instead of going for absolute perfection, how about trying to get just a little bit better month to month?
Then, incrementally, you’ll gradually become less inclined to buy and you won’t even feel the monumental shift that is taking place in you.
Over time those savings can add up to huge amounts and give you options down the road.
It’s better for your health (fast food/chips), the environment and your wallet.
And don’t forget your psyche! Having to stare at your regrets and stressing over finances can take its toll!
Take that honest look at your spending and figure out how much of your spending results in buyer’s remorse. Little by little, see how much of it you can stave off. If you do that, your future self will be so thankful you did!
As always thanks for reading everyone! Please feel free to comment below on anything. If you’re up for it, give an example of your biggest example of buyer’s remorse. Also, if you have any questions, don’t hesitate to contact me either!
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