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Losing money from shopping

If you're like me, then this has happened to you: you go to the mall with some money in your pocket. You eat lunch, you browse some shops, maybe you meet some friends. Hours later you realize that you're at home with a couple of shopping bags. When you check your credit card statement you're simply stunned at the amount of purchases you made.

Many people shop because it's relaxing. Shopping allows you to feel in control of your identity and your destiny. Salespeople are courteous and helpful - you feel like a millionaire! But then you wake up with a retail hangover and bills to pay.

Merchandisers and retailers know that we love to shop. They count on it. They spend millions researching and fine-tuning the exact sort of displays, and offers, and information that will make us buy things from them. Every time we walk into a retail establishment we run the risk that we'll buy something, or many things, that we don't need. We can barely help it.

Why don't we save?

Ultimately, people lose money because it's difficult to save. Why is that? Here are some reasons:

Spending is easy, saving is hard

Spending money results in instant gratification. Saving money produces nothing in the short term. Indeed, it may be years or even decades before the benefits of saving money are realized.

Businesses and marketers work hard to make us spend

How often do you see a television commercial promoting savings? Almost never. On the other hand nearly every TV commercial promotes a product or service that will cost you money. How many of these things do you really need?

Spending is good for the economy

Over two-thirds of the American economy is supported by consumer spending. When we decide to save our money, we're met with increasingly aggressive promotions (really veiled demands!) by retailers to fork over our hard-earned cash. If we don't, then we're causing unemployment. We're contributing to poverty in America. Keynesian economists refer to the "paradox of thrift" - the idea that, for every dollar consumers save, a dollar is lost by a working person.

Saving money is hard. Saving requires foresight and willpower. On the other hand, losing money is easy. All you have to do to lose money is listen to TV commercials, invest in the stock market, buy a house, try to help out a nice Nigerian widow. Because the world wants your money, it will always be easy to lose.

Learn more about this author, George Tucker.
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