A core assumption in Economics states that the goal of a consumer (me and you) is to maximize our level of satisfaction or joy, constrained by our income. Seems pretty obvious right? We should all make decisions to buy, save and spend based on what is going to make us the happiest. But there is a problem – how do you choose between what makes “current you” the happiest and what makes “future you” the happiest. One example of this dilemma is that eating a carton of ice cream makes current me happy, but seeing how I look in the mirror after doing that every day for a week straight is kind of a bummer for future me. The example we’ll focus on in this post is “Buyer’s Remorse,” defined as the guilt or regret sometimes associated with a large or frivolous purchase. So what should you do? Can you satisfy all the “yous” involved? I’ve done my best to lay out the arguments below…
Arguing for the Impulse Buy: Current You
According to economic theory, our goal should be to maximize our level of satisfaction or joy (forget the last part of the theory for now). Whether you desire some new clothes or jewelry that you’ll look great in or some speakers that sound so much better than your current set, you know that special item is going to bring joy to your life. And what better time than now to make that purchase? You’ve been working really hard and you deserve a reward. Future you can worry about making ends meet – and who’s to say future you won’t look back and thank current you. After all, future you will have the awesome new toy and it will all be because current you had the foresight to make that purchase. So go ahead and make the purchase; what could go wrong?
Arguing Against the Impulse Buy: Future You
Current you had one thing right: future you also wants to be happy and also wants your awesome item you’ve been coveting. The problem is that future you’s joy and satisfaction is constrained by income and your current decisions affect how much income is left over in the future. If current you decides to make that impulse purchase it won’t take long before you realize money now feels pretty tight (that’s buyer’s remorse creeping in). After all, it’s no secret that making a big purchase all at once with money you don’t quite have to spare can weigh heavy on your mind and wallet. As you struggle with a tighter budget you begin to regret that impulse buy, and begin to wish you hadn’t made the purchase. So is the answer never to spend on yourself? Not quite – never purchasing anything that makes you happy is no way to live your life and certainly won’t maximize your joy so there has to be an Option Number 3…
Save then Spend: Maximize the Utility for All Involved!
The easiest way to eliminate buyer’s remorse and maximize your joy is to save up and make your purchase. In theory this sounds great, but we all know that it’s far easier to say “save then spend” than to actually do it. Life gets too busy to focus on squirrelling away small bits of money at a time – how can you stay on top of saving for a rewarding purchase when you’ve got bills to pay, mouths (or just your mouth) to feed and a life to live? Luckily, EarnSmart is here to help. On top of providing amazing deals to businesses you’ll love, we help you save a little bit of money every time you use your current debit or credit card, and before you know it you have the money saved up to make your dream purchase. Goodbye buyer’s remorse, hello joy and satisfaction! Enter your name and email at the top of our home page we’ll alert you when we’re read to launch – don’t risk another moment dealing with buyer’s remorse!