I’m all for discussing financial literacy online but sometimes those blanket exhortations to save 10% of our salaries or to keep six months’ expenses in cash grate on me a little because we all know that this would be a good idea but even for those who can potentially afford to do so very often a whole variety of discretionary spending traps extract our money from us and scupper our best laid plans.
Chief among these can be the ‘sale.’

Now I’m a sucker for sale as much as the next person. My mother and I turned bargain-hunting into a fine art. It was a bonding experience for us as we smuggled sandwiches into the Oak Room in David Morgan, a lovely department store in Cardiff, ordered a coffee to fortify ourselves and then scoured the shops. This was wonderful and I wouldn’t change a thing about it. But it has given me a slight addiction to ‘sale’ because it has carved out a deep dopamine pathway to ‘hit the sales.’

Few of us can resist a ‘bargain’ but understanding the psychology behind this can help us do so.
And this is… an unholy marriage of our scarcity complex and the cash illusion.
What do I mean? You can find out more about the Cash Illusion in my book, 10 Things Everyone Needs to Know About Money, but in short, parting with anything other than physical cash often doesn’t feel like real spending, and creates a marked tendency to overspend.
Our scarcity complex? In The Affluent Society, the great late economist John Kenneth Galbraith said: “Nearly all people, in nearly all nations, for nearly all of human history, have been poor. Widespread poverty is not an anomaly. Widespread affluence is.” We are hardwired to overconsume because of the legacy of our survival-orientated scarcity complex.
It worked back in the day but it doesn’t serve us any longer. Instead it leads to us amassing a load of stuff we don’t need, and probably can’t afford. It gets in the way of our best laid savings plans.
If we understand it then we can help control its promptings and we can delete all those clarion emails calling us to online sales or simply swivel to avoid the shops calling for our business.
Happy saving 🙂