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Health and Financial Wellness

Taking advantage of discounts the financially healthy way

When you see a giant “SALE” sign outside your favorite store, it’s pretty easy to get lured in. A discount, especially on something that you’ve been eyeing for a while but was always too expensive to buy, usually makes you feel like you’re getting something of high value at a much lower price. It’s what we call a ‘sulit’ or ‘worth-it’ buy.

But is it really sulit? Or are you spending more than you think?

Why consumers become attracted to discounts

Brightly colored tags often catch your attention as a customer because you know exactly what it means: discounts, which have a bigger effect on you and your savings than you might realize.

It turns out that people are inclined to make purchasing decisions based on emotions. It feels good to buy things that are on sale, and several studies have pointed out the ways in which this could work:

  • Consumers enjoy or feel excited when searching for good bargains;

  • Consumers feel smart or lucky when chancing upon a deal;

  • Consumers feel more accomplished after buying something at a reduced price

The way prices are presented also has an impact on why people decide to buy things.

When you see the discount rate like a “50% off” sign or when you see the difference between the original price and the discounted price, you tend to think that you’re saving a lot. This is called price framing[1].

Safeguard your money

Just because something seems a lot cheaper than what it used to be and you think you’d feel good after buying it, that shouldn’t tell you that you must buy it, especially if it’s something you don’t even need.

After all, why do you look for discounts in the first place? To save. But if discounts are, ironically, causing you to make more purchases, then it's really hindering you from saving money.

If you know that you don’t really need to buy anything, it would be best to keep your money in your wallet. Otherwise, you’d just end up with another unnecessary impulse buy. Don’t let those red tags get the better of you! Avoid the sale signs and plan your expenses wisely so that you can set aside extra funds for purchases you need to make in the future, especially if you know that there will be a sale soon. Not only will you be giving yourself more time to save up for it so that your budget won’t take a hit, but you’ll also be taking advantage of the discount too.

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References:

[1] Gourville, J. (n.d.). The Consumer Psychology of Price: Its Impact on Purchase and Consumption. Marketing Science Institute. Retrieved September 28, 2020, from https://www.msi.org/presentations/the-consumer-psychology-of-price-its-impact-on-purchase-and-consumption/