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The Simple Dollar

Going shopping? Know your target.

Shopping costs you money, Hamm writes, but shopping without a very specific purpose really costs you money.

By Guest blogger / May 22, 2013

A customer carries shopping bags at South Park mall in Charlotte, N.C. Whenever you allow yourself to make decisions on a retailer’s home turf, you’re allowing that retailer to add extra information to your decision-making process, Hamm writes.

Chris Keane/Reuters/File

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One of my favorite places to visit is Prairie Lights Bookstore in Iowa City, Iowa. It’s an independent bookstore with a wonderful atmosphere and I truly love the opportunities I get to browse through the books there.

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The Simple Dollar is a blog for those of us who need both cents and sense: people fighting debt and bad spending habits while building a financially secure future and still affording a latte or two. Our busy lives are crazy enough without having to compare five hundred mutual funds – we just want simple ways to manage our finances and save a little money.

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The problem is that when I go into a retailer without a specific purchase in mind but with an intent to buy something, I’ll usually end up buying something on the spur of the moment – or two or three things.

The last time I was in that store, for example, I wound up buying three books. When I walked in there, I didn’t actually have a title in mind that I wanted to buy. Instead, I was influenced by the store itself when I made those purchases.

(Thankfully, I had budgeted for this. I was anticipating some “spontaneous buying” on that day, so I budgeted that much cash in my wallet for just that purpose.) 

Shopping costs you money. Shopping without a very specific purpose really costs you money.

If you want to save money on every single situation where you’re opening your wallet for an item, there’s a very simple rule to follow. Make your buying decision before you ever enter the store.

If you’re buying food, make a grocery list with as much detail as possible before you go there. Use the store flyer to make your grocery list so that it accounts for the sales. That way, you’re making as few decisions as possible when you’re actually in the store.

If you’re buying a car, do your homework on car models before you ever go on the lot. Know what features you want. Use websites to figure out what cars they have on the lot and research those models. Again, that way, you’re not making decisions while on the lot.

If you’re buying a book at Amazon.com, know what book you’re shopping for before you ever go on the site. Don’t use a shopping site as a recommendation tool – instead, only go there when the only decision left to make is whether to click the “Add to cart” button.

Why should you do things this way? Whenever you allow yourself to make decisions on the retailer’s home turf, you’re allowing that retailer to add extra information to your decision-making process. That information that they give you is going to be engineered almost entirely to convince you to buy the item that the retailer wants you to buy, which is usually the one that makes them the most money.

For example, if you go to an electronics store with the vague notion that you want to buy a camera, you’re going to be inundated with options. You’ll be facing a ton of information without context and, to some extent, without reliability. Are these features you really care about? Are you able to actually evaluate things like image quality or battery life or reliability? Unfortunately, no, you’re not.

Instead, you’re going to get information about the features that the store wants you to know about. A salesman will probably “help” you, in that the “help” mostly involves convincing you to buy now rather than later.

Walking into a retailer or visiting a retail website without your decision already made means that you are going to be basing your decision on a set of information that the retailer gives to you. This is usually not the same set of information that will help you actually make the best purchase. If you base the decision-making process on the information provided by the retailer, you’re using a subset of information that’s not going to push you toward the best option for you.

I use one of two options whenever I visit a store of any kind.

One, I have a very specific item or list of items that I want and have already decided on. I’ve already researched the items in advance and made up my mind what I want to buy before I ever set foot in the store. That way, when I’m in the store, I am not making decisions, thus the decision-making process isn’t being influenced by the retailer.

Two, I have a strict spending allowance before I ever go in the door. That money is usually money I intended to spend frivolously and it comes out of my personal allowance for hobby spending. In this case, I’m basically saying that it’s fine for a retailer to influence my spending choices.

Control your decision-making process and you control your money.

The post The Buying Decision appeared first on The Simple Dollar.

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on www.thesimpledollar.com.

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