What Is Buyer’s Remorse And The Smart Ways To Avoid It

As the Tet holiday approaches, the urge to spend and splurge on your shopping list goes stronger. But don’t get us wrong, of course, you have all the right to buy that limited edition bag or sign up for that pilates membership. You’ve earned it and worked hard to make money (or get that much-awaited Tet bonus), hoping to be filled with joy and satisfaction when you spend it for yourself.

Besides the street decor and the vibe, you’ll know Tet is coming when the smallest boutiques to the largest malls put the ‘sale’ signs up. And you know it’s true, that four-letter red bold sign can be a siren song to so many. More often than not, that leads straight to the pit of buyer’s remorse.

Whether you’re a big spender or frugal in your resources, buyer’s remorse always finds its way to you, regardless of what the receipt says. Before heading to the mall, you might want to learn more about what causes the buyer’s remorse phenomenon and how you can avoid it this coming holiday.

Having a scarcity mindset

By definition, this happens when you are so obsessed with a lack of something — usually time or money — that you can’t seem to focus on anything else, no matter how hard you try. And it is common among those who grew up in poverty, witnessing their family struggle to make ends meet.

Their difficult childhood has reinforced the notion that you should spend money only on bare essentials. Consequently, if they buy anything outside the necessity list, they will be more likely to suffer from a guilty knot in their stomach.

Sometimes, a scarcity mindset doesn’t stem from our personal experience but from the financial education provided during our upbringing. For instance, those whose parents used to live in poverty are more likely to be taught to save money for a rainy day instead of spending it treating themselves.

In essence, a scarcity mindset is a limiting belief where your brain sticks to the idea that you have a limited amount of money available each month, even when you (or your family) are more financially abundant than you used to be.

Money and financial well-being correlate to emotions. You are more likely to feel good when you have a solid financial foundation to afford what you need and want. However, guilt will set in fast when you are not financially capable.

Lacking a budget plan

If you ever splurged without budgeting only to live on instant noodles for the rest of the month, you would understand how intense buyer’s remorse could be. In such a situation, you tend to second-guess any purchases you made earlier, even feeling guilty about what you bought during sales.

People are more likely to experience buyer’s remorse during uncertain periods such as a pandemic or a job transition where their finances are unstable, and their spending priority must be on necessities. Any purchases made out of personal preference during these sensitive phases can easily trigger a feeling of guilt.

On the other hand, budgeting can backfire if you over plan. For example, you find a gorgeous dress you love but outside your budget list. Thus, you are agonizing over whether to buy the dress because the regret of missing it is as intense as the guilt after making the purchase.

Facing pressures to splurge on what we do not want

This might seem unreasonable because who would spend their hard-earned money to buy something they don’t want? However, with the ubiquity of social media, we are often tempted to splurge unconsciously.

This unhealthy spending habit can stem from peer pressure. Some people buy luxury bags and fancy shoes only to keep up with the Joneses, even though the items do not align with the values they pursue. As a result, they often feel the sting of buyer’s remorse, especially when they can no longer afford what they need.

The fear of missing out (FOMO) can also be the culprit, luring you to shell out your pocket money only to regret it later. For example, you buy a movie ticket because it is supposedly a blockbuster, or you purchase a ticket to a popular check-in spot. However, your experience does not meet your expectations, and you end up with buyer's remorse.

How to avoid buyer’s remorse

Understand the root of your guilt

As mentioned above, financial well-being is closely tied to emotions. Therefore, you should trace back to the underlying cause behind your guilt after spending money.

If the scarcity mindset acquired from childhood fuels your spending guilt, you should learn to change your money mindset. Indulging yourself is not a selfish act because it can help light up your mood, so you should make no apology for it.

In my case, I understood at a young age that my parents, who earned a living as public officials, had to live a frugal life and save every penny they made so that I could study abroad. Growing up with such a money mindset, I usually struggled with guilt and regrets after buying non-essentials.

It takes me a long time to realize that I should lead a different financial life from my parents because I am yet to marry and currently working in the private sector. Eventually, I no longer feel guilty about spending money on recreational activities or traveling because they recharge my batteries and enrich my life.

Create a financial plan

Many of us avoid creating a financial plan for different reasons. Some feel stressed about money, while some are embarrassed about their financial situation or spending habits. Others hesitate to budget their money because a financial plan is supposed to limit their freedom.

To overcome the roadblock, you should change your perspective on budgeting by considering it a means to manage your finance efficiently. A budget plan can help you keep track of your money, including how much you have, where your money goes, and how much you can save, then adjust your spending habits accordingly.

Also, you should plan your budget without getting into too much detail. Besides fixed spending categories, you should set a sum for unplanned expenses. This way, you can confidently buy the dress you love in the example above without feeling guilty.

Identify what matters

When facing peer pressure or FOMO, you should think twice before making any purchase. Here are some questions you can refer to:

• What is the benefit of this purchase?
• Is it a short-term or long-term benefit? Does it align with your values or hobbies?
• Will this purchase make you feel more positive or negative?
• Will you get into any trouble if you do not buy it?

Sometimes, you can encounter contradictory answers during your analysis. Suppose you buy a luxury bag. On the one hand, it can serve as a means to prove your fashion style and financial status beyond its practical function.

However, if you are not into luxury things, this purchase goes against the values you hold dear. Also, buying the costly bag means no money left for traveling (which you truly want). Consequently, you are more likely to endure negative feelings after the purchase.

Focusing on positive emotions is key to avoiding buyer’s remorse. For more financial management insights and tips, check out the series “Đáng Tiền.”