Have you ever thought that maybe the people who choose to go shopping guided by the wind in the pockets, without any budget, might know something that we do not know? The ones who randomly buy things without care or worry. One of those many ‘new research findings’ is claiming that having a budget leaves you spending more than you had planned! According to the research, when most consumers go out to shop with a target price in mind, it changes their decision process.

Say for example you were heading out to buy a TV worth KES 30,000. You will most probably look at TVs that range around that price. When you are looking, you notice that those TVs that are higher-priced but within your range have better features, and are of better quality. So what happens? You lean towards them. You will most likely ignore the price and start focusing on the quality. These quality products will cost more than you had anticipated. In simpler terms, after screening first for price, we tend to ignore it and focus on perceived quality, thus spending more than we would have.

So if we cannot make a budget, are these researchers encouraging that we flow carefree and throw away money without a plan? Their recommendation is that the fact that we are aware of this means that we will attempt to overcome it if it strikes. If it happens to us, being aware means that you will know how to counteract. In addition to this, they recommend considering items of a lower price, or deciding first what features in an item matter before making the budget. If you have the quality of the item you need in mind, sticking to the budget will be easier, even though temptation will still be there.

Read more on this research by marketing professors at Brigham Young University and Emory University here