Many people tend to make the mistake of impulsively buying expensive services or goods. In the current economic situation, people should learn to avoid this. To do this, you need to understand how to think about money correctly and approach buying with a "cold" head.
1. Status Quo.
People lose financially because they buy the products and services they are used to, despite the availability of other, more profitable options. For example, retirees stick to the same old retirement plans, stocks, and so on, although there are better options. This is difficult to change because anything new requires more effort to familiarize yourself with new products, and no one wants to regret their decision in the future. Instead, you should be open to new things and not be afraid of change if it really helps you save money.
2. Beliefs.
After a purchase, a person tends to convince himself that he made the right choice. Most people refuse to admit their mistakes, especially with a large purchase. Marketers know this and therefore try to reward their customers using techniques such as a money-back guarantee. After making a decision, the person convinces himself that it was correct. This should be dealt with, since if the goods or services are not suitable, then it is worth returning them to the seller.
3. The trap of relativity.
To be better than someone! Such a thought visits people who have fallen into this trap. They compare themselves to others and want to stand out. For example, it is unwise to spend a lot of money on lunch in a restaurant, when you can eat at home or at a buffet, just to show who has more options. Or buy an expensive phone in a store where all wealthy people usually buy. Better to use the comparative method and look at several options in different stores.
4. The effect of ownership.
People value a product more when they feel they own it. Therefore, when it comes to selling their own things, people tend to set the price too high. Unlike the professional, the amateur salesperson must develop emotional attachment in the buyers. People should be impartial when buying or selling. Set boundaries so that unconscious spending of money doesn't become the norm.
5. Fear of loss.
People tend to sell things when they go up in price and hold on to them when the price goes down. This is a demonstration of a natural desire to avoid losses. Fighting the fear of losing can be beneficial in the end.
6. Rainbow retrospective.
People tend to think better of their decisions than they actually did. This problem arises when you need to make similar decisions again. Whether it is buying a car, buying a house or organizing a holiday. Before making an important financial decision, remember the actual results of previous decisions.
7. Free.
The word "free" is magical and marketers know it. Sometimes a person unknowingly takes the worst product simply because it is “free”. By refraining from such purchases, further financial losses can be avoided.
8. Restraint.
Many financial mistakes are the result of a person's lack of self-control. You cannot put yourself in a situation of temptation. This is why it is often recommended to cut credit cards. People are weaker than they think. And getting into the next financial cycle, a person deprives himself of the opportunity to swim out of it.
