We have all experienced buyers’ remorse at some point in our lives – a sense of regret after making a purchase. Buyers’ remorse happens more frequently if it was a large ticket item. But what causes this sense of regret? It’s caused by what psychologists refer to as cognitive dissonance. We all have a perception of ourselves, supported by our beliefs, and our values. And, cognitive dissonance happens when our actions are at odds with this perception. In the case of buyers’ remorse, it feels that what you bought went against your perception of yourself, your values, or your beliefs.
Many things could cause you to feel this dissonance.
If you used credit to make the purchase, you might have felt uneasy about getting into debt, especially if you are averse to debt. If you are usually frugal, buyers’ remorse may set in if you splurged on something you never would have thought you would.
It could be as simple as buying the most expensive coffee on the menu at Starbucks after years of buying a regular coffee. Or it could be buying a BMW after years of driving an economical compact car.
Or, you may have also felt that you did not deserve what you purchased even if you had saved up the item. An idea you adopted while growing up. You may feel dissonance if what you bought would be perceived as extravagant by your family, your friends, and even yourself but many of us still do care about what others think about us. And this impacts our decisions or impacts the way we feel about our decisions.
Buyers’ remorse can also creep in if you felt the salesperson was dishonest in some way. We all like to believe we are not quickly taken in by smooth-talking salesmen.
How can we reduce the incidence of buyers’ remorse?
We can become as informed as possible about what we want to purchase. Research online, talk to experts, or comparison shop. We can discuss our intentions with a partner. It’s always good to get a few different opinions. Buyers’ remorse is not always about making poor financial decisions. We can experience buyers’ remorse even after making a sound decision.
Money is so much more than just numbers.
Making financial decisions we can live with goes beyond just eliminating buyers’ remorse. It is about consistently managing your money in alignment with your values. First, you need to be clear about your core values. Can you name your top five core values? We all share many similar values, such as integrity, family, fairness, and respect. But the values I consider most important to me may be different from what you consider most important to you. If you have not done so, it’s time to discover what your top 5 core values are.
Once you know what those are, the next step would be to look at your last three to six months of credit card or bank statements. Does the bulk of your expenses go towards what you value? I recall a friend being alarmed after doing this exercise at the portion of her income going towards fine dining. It was not where she would have wanted her money spent. She soon made changes to her habits, inviting friends over for dinner more often instead of going out to eat.
What does money mean for you?
Money means different things to different people. For some, it’s about safety and security. For others, it could be about freedom and opportunity, How we perceive money impacts how we use money. What does money mean for you?
Think about the last few times you made a financial decision. You may believe you were making a rational decision. Chances are, there were emotional underpinnings to your choices. It could be as simple as buying a pair of new shoes or as complex as selecting an investment for the long term.
The cost may have been one consideration. But, other thoughts and feelings may have been lying just beneath the surface. Many factors influence how we approach money. Understanding these could help us make better financial decisions.
Below is a process you can use to help you make more conscious decisions you can live with.
Before making significant financial decisions, ask yourself:
- Do I need it?
- What does this financial decision mean for me? More freedom or more security?
- Is it aligned with my values are or have my values and priorities changed?
- Will this decision bring me closer to my goals?
- What are the consequences of making the decision?
- Has anything changed?
- Have you lost focus?
- Are you looking too far ahead at the expense of the present?
- Or are you too afraid to look at your future and are living only for today?
Answer these questions often enough and you will get a clearer understanding of your existing relationship with money. You will also start to align how you manage your money with what you value most in life. Decision-making is a process, and you are never dealing with complete information. But if you are in alignment with what your heart values, then it makes things a lot clearer. It may not be easy, but it is much clearer.
Jennifer helps people discover how to live life on their terms. She coaches women in achieving their personal and business goals.
She has written numerous books on money: Women and Money: 7 Principles Every Woman Needs to Know to Be Financially Prepared in Any Economy and Growing Up With Money: Raising Financially Resilient Kids in an Age of Uncertainty.
You can reach her at firstname.lastname@example.org
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