Before you head out this Black Friday convinced that you (and your credit cards) are immune to the madness, consider this:
Even a certified financial planner can get caught up in the spending hype when shopping with friends.
Maggie Kirchhoff, a Denver-based CFP and vice president with Wisdom Wealth Strategies, calls herself “one of the most frugal people you will meet.”
But on a women’s trip a few years ago, the group’s shopping — and spending — quickly got out of control. “Groupthink just takes over,” she says, “and all of a sudden you realize you’ve just spent $300 on a purse that you might use for a year.”
Whether we’re shopping with family, friends, or even nameless strangers in the crowded stores this holiday season, groupthink deserves serious consideration if we don’t want to overspend, she says.
“We all fight peer pressure when shopping,” Kirchhoff says. “As a society, we want to put our best foot forward, and keeping our shopping appearances in shape provides a fair amount of pressure. Some fight this pressure better than others.”
Shopping is a social experience, says Ali Besharat, an assistant professor of marketing at the University of Denver. “We as human beings are social entities, and we are susceptible to social influences.”
Lone-wolf shoppers may think that because they’ve left friends and family at home, they don’t have to worry about those influences. But, Besharat says, social pressure can even come into play when we shop alone.
“Research shows that crowded stores — stores crowded with other shoppers whom you don’t even know — can lead you to spend more, and spend on impulsive purchases.”
The other shoppers prime you, he says. “Most people may not actively think about it, but it’s subliminal.” It tends to make shoppers think there’s an attractive price, and that’s why the store is so crowded. Or it makes them believe there’s limited availability — and “They may sell yours!”
Margaret C. Campbell, a professor of marketing at the University of Colorado-Boulder, says she thinks of three major influences that come into play when we’re shopping with others.
“One is that their behavior can prime your behavior: If someone is eating a lot, you tend to eat a lot; if someone is spending a lot, you tend to spend a lot.”
This can result in a positive influence — “If you take your sister, who you know is a really careful, thoughtful buyer, she may influence you in a good way” — or a negative influence, if you take along someone who spends carelessly.
The second factor, Campbell says, is that “you start thinking at some level about what they’re thinking about you. You don’t want to seem like a spendthrift, or like you’re too cheap to buy people nice gifts.”
Third, she says, we tend to enlist trusted friends and family members as helpers. “This can be really important in big purchases, like if you go shopping for a car,” she says. “They can sort of balance out the persuasive impact of the salesperson … having someone with distance, someone who isn’t really involved in the interaction, can be really helpful.”
About that third point: DU’s Besharat says research shows that if you’d like to enlist a helper for controlling your spending while shopping over the holidays, the right companion might already be in tyour house.
“When adults are shopping with other adults, they tend to have more hedonic (pleasurable, rather than utilitarian) shopping goals, because they’re just having fun,” he says. “And people on average say they have more fun shopping with a friend than a family member … which is not surprising, I guess, because they let them spend. They don’t say, ‘Hey you don’t need this.’ ”
Your friends want to give you moral support, even when shopping, he says. But shopping with family members instead reduces impulsive purchases. They also know you and your spending habits: ‘Hey, I know how many pairs of jeans you have in your closet.’ ”
Goals and lists
Whether you’re shopping with friends or family this holiday season, CU’s Campbell says it’s a good idea to set your goals and share them. “If you make it clear to your friends and family what you want out of them, they can be very helpful.”
Having a list of gifts and a budget before you go shopping on Black Friday (or any time) makes it much easier to save, Besharat says.
“Research in psychology shows that when people set goals before committing to an activity, they do better,” he says. “There’s research that shows that when people create a shopping list before they go to a grocery store, they spend 30 percent less than people without a list.”
For holiday shopping, he suggests taking cash to the store to stay on budget. And when you’ve spent your cash? You’re done shopping.
Financial planner Kirchhoff also advises making a list and a budget before hitting the stores. If it’s on the list, buy it. If it’s not, don’t, she says. It’s not easy, but it’s worth it.
“We all have these goals, like sending our kids to college, or saving for retirement … but when you have your list, write down some of those goals on the top of that sheet, so every time you get out that list, you’re reminding yourself what’s really important at the end of the day.”
How to choose the right buddy to help you shop smarter
Ali Besharat, an assistant professor of marketing at University of Denver, studies our shopping habits, and specifically, how we shop together. He has a few scenarios to consider before you ask someone to go shopping with you this holiday season:
Children who are more free to move about the store — not in a cart or stroller — request more items from their parents. Also, if you shop frequently with your children, you’re used to hearing “I want this,” and are more likely to say no. If you shop with your kids infrequently, you’re more likely to say yes when they request a new toy.
Teens buy more when they shop with other teens, in order to comply with group norms — even if what they’re buying isn’t very desirable. When teens shop with their families, family members play an informational role — “How are you going to use this?” — and compulsive buying is reduced.
Adults cover more territory in a store or mall when they shop together, which means they are exposed to more consumption, which can lead them to spend more. Adults shopping with adult family members tend to make more considerate and less wasteful purchases. Adults shopping with friends tend to buy more unnecessary products.
Couples and shopping: Research shows that 88 percent of married couples disagree when shopping together. Husbands tend to be less willing to compromise on a decision in a shopping scenario. Husbands are more likely to do utilitarian shopping; wives are more likely to do more hedonic shopping.
Black Friday tips
Shopper see, shopper do. Research shows that the more consumption of others that we see, the more we spend. So try to ignore other shoppers, says Ali Besharat, assistant professor of marketing at the University of Denver, even though that’s a challenge on Black Friday.
Get it online. A report last year found that Cyber Monday helped people save money, Besharat says. “It’s not only the prices — people spend more rationally. (On) Black Friday, there’s a physical effort. Also, you’re seeing other shoppers,” so that social influence is in play.
Stay out of the lines. Besharat’s research has found that the time commitment of standing in line for Black Friday can spur impulse purchases. Stores have a limited number of items at low prices, and if they’re sold out by the time a customer enters the store, the customer will look for something else to buy, because it was a commitment to wait in that line.