Photo: Business Insider / Daniel Goodman
A new study out of Brigham Young University and Emory University may refute what many of us thought about budgeting. Consumers who walk into the store with a spending limit in mind actually spend up to 50 per cent more than those who don’t, according to the study.
When people plan for a group of items–say, their groceries—most can stick to their original budget, even if it means spending more for particular items.
But that’s where most people mess up. The study explains:
“If we decide we’ll spend about $500 on a new TV, we look only at TVs around that price range. Of course, once we do that, we start to notice that higher-priced sets within that range have more features and better quality, so we lean toward those. Larson’s study found that after we screen our choices based on price, we essentially ignore price after that and focus on quality. And better quality products usually cost more.”
Still, this doesn’t mean budgeting is entirely bad. Consumers just need to be more conscious of how they shop.
Here are two easy things consumers can do before they walk into a store, per the study:
1. Base your choices on quality first, then reconsider price.
2. Start shopping by determining what features and quality levels matter most.