Recession School: Three Things to Think About Before an Impulse Buy
Welcome, class, to a special session of Recession School. I've been scoping the greater Denver area for local experts who will use their smarts to help us navigate the murky waters of the recession. And these are complex waters indeed. We know that we need to be thrifty. Green. Efficient. We need to be entrepreneurial, but cautious. It's a lot to take in, so we'll take it one lesson at time.
Our first Cheap Thrills professor is Laura Brandau, who works as a consulting business analyst and serves as the middlewoman when businesses start picking out software projects, helping both sides work efficiently through the process. She also blogs about it at bridging-the-gap.com.
Brandau has translated her skills as a business analyst to help everyday consumers with our first lesson: What should you ask yourself before plunking down the cash on an impulse buy?
Step 1: Don't go shopping without a plan
I recently confessed that I entered the Outlets at Castle Rock without a shopping list. Bad idea.
"In business analysis we always have to start by making a list of the things that we want," Brandau explains, and I nod, looking at the third pair of flip flops I bought last weekend. "If you make a list before you shop around for solutions you'll go into the shopping knowing better what you're looking for."
I confess about my recent shopping trip and Brandau laughs. "I'm much better when it comes to software."
Step 2: Question the purchase
"In our field we ask ourselves, 'What problem am I trying to solve?'" Brandau says.
I've never thought of it like this. I have a raccoon-like approach: "Shiny!" I'll think, and then it's in my shopping cart.
"If you go shopping, come across a pair of shoes, and immediately want them, stop and think if they'll provide value for you. Step back for a minute and ask yourself what problem you're solving: Does it finish off an outfit?
"Then think what solving that problem is worth for you," Brandau adds. "Is it worth the cost of those shoes, or could you just dig in your closet for an older pair of shoes that solve the same problem?"
Step 3: It's okay (sometimes) to buy stuff because it's cool
"Sometimes the reason you want something is not related to what the product addresses," Brandau points out. "But it helps with status--or has a coolness factor."
These are hard to ignore, and Brandau says she ended up caving for a "cool purchase" recently--an iPod.
"I thought I would just get another mp3 player, I really didn't need an iPod, but I justified it to myself because I had gotten some interrelated products that I couldn't use without it," she says.
I agree. I've recently been green with envy over my friends' iPhones, especially now that my free-with-rebate phone is missing a large chunk off the top after I dropped it on the sidewalk.
"The point is not to give up on splurges," Brandau says. "Just realize what needs they are filling, and think of how to balance that."
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