Are Your Purchases Like Super Bowl Ads?
February 19, 2016Less than a week ago, I had friends over to watch the Super Bowl. We had a bit too much food, drank a few adult beverages and watched a game filled with excellent defensive play. It was a pretty good game.
Yet, before kickoff, the majority of the group was more excited about the commercials during the game than the game itself. It’s amazing how expensive the commercials are. For this year’s game, the cost for a 30 second ad was $5 million. That’s a LOT of money for an ad.
If I were spending that much money (and I wouldn’t) on a TV ad, I’d want it to be remembered for years. I asked several people today which ads they most remembered, and no one could remember more than two. There were probably 50-100 ads during the game, yet most had zero impact less than a week after someone decided to spend $5 million for a 30 second spot.
Like Super Bowl ads, most people I know have spent more money than they wanted to on a purchase that they regretted shortly thereafter. It could be exercise equipment that is quickly converted into a clothes drying rack, a purse that hangs empty in a closet, a fancy dress that still has the tags on it 3 years later, a classic car that sits covered in the driveway waiting for that one last repair before it gets on the road, or any other big ticket item that felt awesome on the day of purchase but now sits there as a reminder of how much money you spent and how little “bang for the buck” you got from that purchase not too much later. The dollars used for that purchase could have been far more useful (in the eyes of a financial planner) to pay down debt, to save for the kids’ college fund, to add to retirement savings or even to purchase a life experience (trip to New Zealand to see the All Blacks play).
I have been guilty of making purchases that I have quickly regretted. (See: engagement ring.) Even financial planners make financial mistakes! So now I have a set of rules in place to help prevent me from making a big ticket purchase that I probably shouldn’t make. If you are contemplating a larger purchase or are prone to impulse purchases of expensive things, consider implementing a few rules to help prevent future regret:
1. Define what you consider a “big purchase.” For some, it could be $100. For others, it could be $500. For Donald Trump, it might be a small amount like $1 million. For anything above your amount, take a deep breath and look to your “rules” about large purchases.
2. Determine if it is a want or a need. If you’re diabetic and your large purchase is insulin, by all means make that purchase! That’s a need. If it’s a newer, cooler phone, that might be better classified as a want. For needs, the answer is pretty clear but for wants, make yourself walk away and buy yourself time.
3. As for time, I have a mandatory 7 day waiting period on any expensive “want.” I will walk away from the Best Buy display and give myself a week to cool off. During that week, I look for reasons to not buy something. Usually, I don’t.
4. Have a “voice of reason” in your life. Even for those items that I want after my 7 day cooling off period, I still don’t immediately head to the store to purchase the item. I have a few friends/family members that I use as my internal voice of reason. I tell them that I want to buy that thing and that I’ve given myself a week to walk away, yet I still want it. I ask them to tell me why it’s a bad idea and usually, that works.
5. When it doesn’t work, I go online to look for better prices and read negative reviews. Usually, there is a review or two in there that make me question why I wanted the item in the first place. If the reviews don’t talk me out of it, at least I find a better price than I saw initially and I get a good deal on the item.
These specific rules may or may not work for you. Put your own rules and control procedures in place for yourself. You might be able to stop yourself from overspending on something you’ll regret later.