3 ways to control your spending in 2014

Science has thrown up some fascinating facts about how the brain operates when we're in consumer mode, and the processes at work when people over-spend. 

Apply some science to control your spending

There are three main factors at work - and to watch out for - if you want to keep spending under control in 2014:

1. Biological Factors: Don’t go shopping if you’re hungry, pre-menstrual or have just emptied your bladder.

You may not realise that your physiology is affecting your behaviour. But when you're hungry you will buy more food and make higher calorific choices at the supermarket. When in an anxious state you will be more likely to impulse-buy. That's because the physical state of high arousal leads to a depletion of the resources that govern self-control. And fluctuations in activity in the brain’s orbitofrontal cortex during the menstrual cycle will make you more likely to go on a spending spree when premenstrual. And more rational and controlled post-ovulation. Even an empty bladder affects your brain’s control mechanisms. Science has shown you’ll be more likely to (sorry) splash out if you’ve just spent a penny. So pay attention to your body before hitting the shops, it may be telling you to hold fire.

Try timing shopping trips with your menstrual cycle and avoid the pre-menstrual phase

2. Emotional factors: Don’t shop if you’ve just had a row, a stressful day or been dumped by your boyfriend.

People experience a range of emotions (anger, fear, sadness) in their daily lives and engage in all sorts of behavioural responses to keep them in check.  Some women find shopping gives them an emotional outlet, the way that alcohol or drugs can do for others. It distracts them from negative feelings and provides comfort in the form of a treat or reward. In fact studies of compulsive buying have shown that its prime function is to repair mood. So spot when emotions are running high and find an alternative way of releasing them. Find  distraction through exercise or relaxation, or seek social support by spending time with friends. Concentration, whether on gardening, painting or rock-climbing, is also a good way to absorb negative emotions. And the Do Something Different approach to behavioural change could help see you through the tough times because it's all about about breaking habits and increasing behavioural flexibility.

Buyer's remorse is like a shopping hangover

3. Cognitive factors: Don’t go shopping with low self-esteem and an “I deserve it attitude”.

Impulse purchases can trigger a lot of self-justification in the consumer, to assuage the guilt of over-spending. Their thoughts echo with the messages that have been implanted by constant brain-washing and bombarding marketing campaigns. Thoughts such as “Why shouldn’t I have it?” “I work hard I deserve it” “My friends will love me for it” and so on. Self-talk can also shift the focus onto the wrong things, “I’m saving £100 by buying this in the sale” (instead of, “I’m spending £200 I don’t have") or even "I'll show him!" Some cognitive reframing can help here. Relabel your credit card your debt card. Silently answer the ad-men back. Recall when you last had buyer’s remorse and tell yourself how you’ll feel tomorrow. And find ways to boost your self-esteem so that you can resist the constant bombardment of persuasive messages. 
Few people greet a large credit card bill with the words, “Because I’m worth it”.

Counting the cost of fast fashion

This fascinating article touches on fashion psychology and was originally published in The Conversation

By Alice Payne, Queensland University of Technology

There’s a polyester mullet skirt gracing a derrière near you. It’s short at the front, long at the back, and it’s also known as the hi-lo skirt.  Like fads that preceded it, the mullet skirt has a short fashion life, and although it will remain potentially wearable for years, it’s likely to soon be heading to the charity shop or to landfill.

The mullet skirt may not last more than a couple of months as a fad, but the fast-fashion trend has shown considerably more longevity.  With Spanish brand Zara compressing lead times to as little as 13 days, and the UK’s Topshop releasing 300 new styles a week, fashion trends are being captured and sold far quicker than ever before.

Catwalk styles can become high street fashion within weeks. AAP

In Australia, although Zara and Topshop only arrived in 2011, many local retailers have been following an accelerated fashion cycle since the early 2000s. Valleygirl releases 65 new styles per week, Supre has daily deliveries, and the mid-market Witchery boasts 400 new styles per month.

Fast fashion has enabled a democratic engagement with the luxury of constant novelty, once only the domain of the very wealthy. Now high fashion trends are instantly accessible online, and the physical garments are for sale at prices which have never been lower.

However, the garment’s price tag does not acknowledge the environmental and social cost of overconsumption.

In the UK, some 30 kilograms of textile products, per person, per year go to landfill. What isn’t sent to landfill goes to charity. A single Smith Family sorting centre in New South Wales sorts 10000 tonnes of donated clothing each year. Much of this will be sent to developing countries, a trade that can be disruptive to local textile industries.

Cotton requires a large amount of water to grow – but often ends in landfill. AAP

The two most popular fibres for fashion apparel – cotton and polyester – each have considerable ecological impacts in production. Conventional cotton alone accounts for one quarter of global pesticide use, linked to poisonings and air and groundwater contamination. In addition, cotton requires a global average of 11,000 litres of water per kilogram, to produce.

With a world population of seven billion, and a projected nine billion by 2050, food security and water security will become increasingly pressing policy concerns. The volatility of cotton prices in 2010/11 is possibly a foretaste of this, with cotton prices rising to their highest level in the history of the New York Stock Exchange.

The launch of Spanish retailer Zara in Australia has seen lead times compressed to a mere 13 days. AAP

Australian fast-fashion retailers face additional short-term challenges. In 2011, bricks-and-mortar retail was at its lowest ebb in Australia since 1962, and across the fast fashion market, clothing was reduced up to 70%. Local labels are affected by the rising fibre prices (not only cotton but polyester of cotton quality) and rising Chinese manufacturing costs. The forthcoming carbon price may also lead to rises in the cost of freight and raw materials. In addition, a greater number of consumers are choosing to buy clothing online from cheaper overseas e-tailers.

Australian designers and retailers can adapt to these challenges through examining the garment life cycle to identify points of intervention. For example, more efficient use of resources would see disposable faddish items such as the mullet skirt collected at end-of-life for closed-loop recycling, in which its polyester can become feedstock for new textiles. (See Kate Fletcher and Matchilda Tham’s Lifetimes project, or Patagonia’s Common Threads program.)

Crucially, fast fashion is not merely fast material throughput of garments, but a sophisticated global image and information system which, to some degree, is weightless. As fashion is intangible, it is not necessarily tethered to the purchase of new clothing. An example is The Uniform Project, in which blogger Sheena Matheiken wore the same dress for a year, styled in 365 different ways.  With this perspective, a fast-fashion company’s role may evolve into that of a service provider, not simply a retailer. These services may include styling advice, alterations, clothing libraries or collection of the garment at end-of-life.




In Australia, Supre and Sportsgirl have followed the lead of Topshop and American Apparel in offering a small selection of vintage clothing alongside their new stock.

There is no contradiction in fast-fashion retailers selling second-hand clothing, as the speed of trends mean that styles come in and out of fashion so frequently that some version of “vintage” style is always in style. Within the context of fast fashion as ‘post-brand’, second-hand styles simply become additional grist for the mill, as consumers will mix and remix the product (of whatever provenance) in their personal, restless search for novelty and individuality.

Fast-fashion principles also drive the success of online marketplaces such as eBay, in which second-hand clothing can be circulated again and again, revalourised by individual consumers. Similarly, the Salvos charity stores in Australia and Oxfam in the UK, now sell second-hand fashion online, grouped into ‘lookbooks’, complete with fashion shoots.

While the Rococo excess of a new frock a week may be unsustainable, a different fast fashion – one that relies less on overconsumption of new garments and more on the inventive reuse of existing materials – can emerge.
Alice Payne does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.
This article was originally published at The Conversation.
          Read the original article.
       

The Psychology of...the Handbag!

'No, Alan, not like that, hook the handbag over your wrist and keep your palm turned upwards.'

Of all the directions I thought my career might take me, teaching Alan Titchmarsh to carry a handbag was not one I had imagined.
But I found myself doing just that recently, when recording a piece about handbags for the Alan Titchmarsh show (on ITV today, 3pm). 
Alan was such a good sport and minced onto the set carrying a gorgeous little snakeskin number, one of many designer and vintage handbags featured whose extortionate prices raised a few 'ooohs' from the studio audience.


We live in a time when the handbag has become the ultimate statement piece for women. And even in these days of austerity many women seem reluctant to ditch the designer bag. In fact for many, a touch of regulated self-indulgence feels more necessary than ever.

Why? 
Here are a few of my theories. Or what I call my 'handbagology':

Status symbols

“I loved all the admiring glances I got from my friends when I walked in with it.”

It used to be men who advertised their status,  with the flash car or expensive watch. Now women are earning more and competing at the top they too are signalling their status to others. They choose a bag  - usually a huge in-your-face tote - that says, I’m successful, I’m expensive, I’m chic. Many women at the top assess their own and other women’s status by the handbags they use.

Rule No 1: Your bag shouldn't weight more than you do.

Compensatory consumption

My research has shown that women spend more when depressed, believing a purchase will cheer them up. They might get a brain ‘buzz’ from buying it, but it may be short-lived and will not eliminate the cause of their negative emotions. Ironically, the harder the times the more women will seek solace in this way. And probably the bigger the bag the greater the void in their lives.  But beware. In the words of my friend Jessica Chivers, ‘Happiness is NOT a handbag!’

Celebrity worship

“I saw Beyonce with it in a magazine and so I had to have it.”

We’ve seen a huge rise in the cult of the celebrity and in the desire of women to emulate them. You may not be able to get the Beckham figure, millions or footballer husband, but you can get the bag. Or one like it. Some designers are cashing in on this and using celebrities to advertise their handbags, like Coach using Gwyneth Paltrow.

Rule No 2: Don't believe if you buy the bag you'll look this good

Believing a bag is an ‘investment’

I once heard a fashionista on Woman’s Hour declaring that she ‘invests in a designer handbag each season'. We delude ourselves if we view high-priced fashion items as an ‘investment’. Most aren’t. (Just to be safe, in case the bottom drops out of the handbag market or there’s a world clutch-bag crash, I’d recommend an ISA.)

Identity

“It’s a kind of passport into the business world. It says, ‘I’m worthy of a job in fashion’”

Humans have evolved to belong to a group, we crave to be seen by others and feel part of something. An expressive wardrobe is a way of signalling not just which group you belong to (teenage groups have their own cool trends which distinguishes them from others) but which you aspire to. Many feel a designer bag makes them seen and sends a message to others: I want to be one of the Gucci crowd, I’m a Prada girl. There’s even an optimal way of carrying it to show it off to the max. The logo is always displayed, the bag hooked over the wrist, palm held upwards.

Feeling fat? The bag always fits…

If women feel the urge to shop but are feeling fat they can buy a bag and it will always fit, whereas clothes are very figure-dependent. The same goes for shoes.

The power  - and cost - of the brand

"I know a lot of women who will starve to get a handbag. I’ve got a lot of friends like that.”

I came across the comment above on an online site (theartofthebag.org). Millions of pounds of clever marketing go into promoting and advertising designer handbags, and some women will even go into debt to have their bag of desire.

Creating scarcity

Luxury brand items are now more available – at airports, on the high street, online. So the marketers create a sense of scarcity by limiting the availability of certain items. This stimulates even more desire. Brain research shows we get huge pleasure not just from getting something but from anticipating having it. The luxury brands cash in on this by creating waiting lists, making women want it more and obliterating the difference between want and need.


All goes to show that a bag is so much more than somewhere to keep your purse and your keys!

It's panic-now-pay-later week. Would you credit it?

This week is panic week. 

The week when we panic-buy those extra presents (just in case she buys me one), that extra food (can't have too many mince pies) and drink (come on, it is Christmas after all). That extra ton of tinsel and kilometre of lights.

And the panic-buyer's best friend is their credit card. Knowing you can panic-now pay-later makes it all too easy to slip those extra goodies into the basket.

But how much will credit card debt cost you if you only make the minimum repayment on your card?

Test how much you know with this simple question, taken from Martin Lewis's brilliant money saving site.

Question:

Your New Year's resolution is to stop borrowing, but you've still £3,000 on a credit card at 17.9% interest. How long will it take to clear if you're making the minimum monthly repayments (the higher of 2% or £5)?

A. In two Christmases time

B. In eight Christmases time

C. In 14 Christmases time

D. In 41 Christmases time

Think about it before scrolling down for the answer.

Mmm...shouldn't have stuck all those presents on my visa card.

The Correct Answer is: 
D. In 41 Christmases time

Staggeringly if you only make the minimum repayments it’ll take over 41 years to repay the card at an interest cost of £6,300. Minimum repayments are designed to keep you in debt. Think about it 17.9% interest a year is about one and a half percent a month – the minimum payment is 2%, so you’re not doing much more than servicing the interest.

Further Info: See the money saving expert's full Minimum Repayment Calculator which includes a guide to beating the trap.

If this doesn't apply to you but you know someone who needs help keeping their spending under control, a copy of Sheconomics could be the prefect present.

Shop like a Zombie

Pasty-looking people with unfocussed eyes goggle menacingly at the shop’s window display, hands and faces pressed hard against the glass. Cabinets of sparking goods stand within. An unearthly moan of desire emanates from the frustrated crowd.

What’s this? A description of shoppers waiting for Primark’s doors to open on a Saturday morning?

No, it’s actually a scene from Romero’s film, the Dawn of the Dead. And the pasty-looking people aren’t shoppers. They're zombies.

But the scene does capture something that Philip Horne, in his article ‘I shopped with a Zombie’ descibes as the transformation of merchanise into a spectacle which, these days, seems to have a compulsive quality. And researchers have now identified the kinds of magical transformations that many shoppers expect when making purchases.

In her study Marsha Richins, from Trulaske College of Business, identified four types of expectations:

Transformation of the self

That’s the belief, commonly held by young people and people in new roles, that a purchase will change who you are and how people perceive you. For example, a woman interviewed for Richins study wanted to have cosmetic dental surgery because she thought it would improve her appearance and self-confidence.

Transformation of relationships 

Is the expectation that a purchase will improve your relationships with others. For example, a woman in the study wanted a new house as she thought then she'd entertain more often and make more friends.

Hedonic transformation

This is the belief that a purchase will make life more fun. For example, a man in the study believed a new mountain bike would give him more incentive to get out and go on "an adventure."

Efficacy transformation

is the expectation that purchases will make you more effective in your life. For example, some study participants believed buying a new car would make them more independent and self-reliant.

Nothing wrong with any of these reasons, you might think. They only become problematic when the purchaser spends the money and then, as often happens, doesn’t get the expected outcome. Because things like good relationships, independence, self-reliance and confidence come from working on your inner self, not from outer trappings.

Research shows that most people's beliefs about the life-transforming properties of their purchases are completely fallacious. Yet these beliefs are still very powerful motivators to spend. Worse still, if you have strong and unrealistic transformational beliefs you are more likely to overuse credit and take on excessive debt.

In Romero’s film the zombies rise from their graves and stagger to the shopping mall. What a shame no-one told them those glittering prizes wouldn’t be life-transforming.

When 'joint' doesn't mean 'equal'

I recently heard of someone who, like many women, merged her bank account with her husband’s when they got married.

A few years later the marriage broke down and she discovered their credit card was actually held in her husband’s name, with her as an authorized user.

Not having any recent active credit card history then worked against her and it took her two years to get her own credit card.

The moral for marrieds is:

If you have a joint account consider also having credit cards in independent names.