Spend to Save

I managed to survive.

I didn't buy one thing at a Black Sale.

I don't even know (I know exactly) why this is a thing at all in Finland, or anywhere else in the world outside of the US - just a money grab. Yet, despite the economy being in the toilet, when I went to the local shopping center to have Adventure Friday with Smallsteps, it was packed full of people looking for a bargain.

I guess if you really need something.

But, is it a bargain? Unlikely. Which is why Finland is bringing in new laws for sales in 2023 that says that anything on sale has to also show the lowest price it has been in the last 30 days, to better inform consumers. The reason is that these retailers are offering 30-70% off items that they boosted in price for a few days last week, just so they can. Yet, people don't seem to care, as long as they feel they are getting a bargain, they will keep buying and buying, and buying a bit more on credit.

I had a walk around our house the other day to take inventory of the things we need and if there was anything pressing, just in case there was something on offer, but didn't find anything that couldn't wait a bit longer. With the winter coming in fast and electricity prices likely to skyrocket for us in the coldest months, we are holding off on getting anything unless necessary.

The thing is though, that all of these sales are compelling because we have been conditioned to respond to them, especially in harder times. It is a weird thing in us perhaps that we look at the price of something on sale and feel that we have "saved 20 percent", rather than recognizing that what we actually did was, spend 80 percent. It is a framing problem and if we were to reframe the purchase from the perspective of spending instead of saving, we would likely buy far less at the various sales.

Saving money is a gain. Spending money a loss.

The idea of "you have to spend money to make money" doesn't extend to consumer items - unless you are going to use them to do something you are going to get paid for. If not, it is all a loss, so make sure you are really going to enjoy the product, don't justify it by saying "it was on sale" because that is still a loss. When you have a 100 in your wallet and you spend 80 of it on a 20 percent off item, you didn't make 20 dollars.

But, this mental gymnastics is common and it is costing us dearly. There is an argument about stimulating the economy to be made of course, but at the same time, we could also stimulate the economy by buying useful items instead of crap too. Sure, the crap-makers will go out of business, but is that such a bad thing?

It is like the argument where it is said that clean-tech is too expensive in comparison to fossil fuels, but making that shift still stimulates and incentivizes the market, so the cost balances in the economy. The difference is, fossil fuel peddlers will lose their market in the process. An economy is just tracking resource allocation, it doesn't care what resources are being used.

Imagine if you could go back and use all the "wasted" money you have spent in the last five years and invest it instead - would you be better off now? Just imagine if everyone on earth had done that - what would the economy look like and what kinds of investments would be popular, thinking that the majority of consumer goods businesses would fail?

Imagine if that is what we did as a global community, where instead of funding wars, or spending money on useless pandemics, we invested it all into something like clean energy development, battery tech and improving wellbeing. Would we be in a better position as a society now?

Resource allocation.

We aren't very good at making good decisions with the resources we have.

Obviously, I am an idealist at heart who believes that there are not only better ways, but there is a chance that we will find and use them. I think though, that just like we know we shouldn't buy crap consumer items we don't need, we know the way, but we just don't want to take the steps down that path, because it doesn't feel as good as having something new and shiny, even if it will be old and dull next week.

At least for most of us and definitely for me, impulse control is hard for many things and we are then influenced by the market to act on our impulses, which is why so many are overweight. Most of the advertising is designed to make us feel bad about our lives, as if something is missing that we need to have to fill it. Or, it is designed to make us feel bad because we don't have what they have and therefore, we will find something else to fill that void. We tend to take the easier way out, even if it is harder in the long run.

Just look at the complaints about body representation in magazines, where people expect the magazines to change the models they use. How about, not buying those magazines? And then, how come the assumption is that influence of seeing those kinds of bodies gives the audience negative results? How come people aren't inspired to get into better shape? And then, if they fill the magazines with "average bodies" doesn't that inspire people to be even worse?

When I watch a World Cup game, I don't want to see a field full of average footballers, I want to see the best the countries have. Similarly, if I am buying a magazine, I don't want to see average people - the streets are already filled with them.

But it is is easier to blame advertising than to actually do something about it, but again, it is about resource allocation. If people really want to enact change, choose how we allocate our resources better. If people really don't want to see "skinny people" in magazines, don't buy those magazines and, if people really dislike these sales so much, stop buying from them.

Money talks.

It is about supply and demand and if what is being supplied has no demand, the providers will change what they supply, because that is how an economy works. Of course, they are going to use all the tricks they have to direct resources to what makes them the most money, but that is what they are designed to do.

They apparently know our design better than we know our own.

Which is why marketing works, because if we knew ourselves better, we wouldn't be nearly as influenced by what we see and hear. But, we are influenced. All those glossy magazines full of beautiful, photoshopped people might make a few anorexics, but take a look around, what is causing the weight at the other end of the scale?

Maybe it is the same thing.

While a few people are inspired to look like those in the magazines, the majority go the other way instead, consuming even more than they would have otherwise.

I can't look like them, I may as well give up and eat what I want.

Consume a bit more.

So yeah I wonder...

If as a world we spent the next five years allocating our resources well - what would the averages of society become?

Would we be spent, or saved?

Taraz [ Gen1: Hive ]