Why Do We Feel Buyer’s Remorse, Anyway?

By Dan Rafter on 22 June 2016 0 comments

Jackie Lam does just about everything she can to avoid buyer's remorse — the sinking feeling you sometimes get after making a large purchase, like you've just made a big financial mistake.

Lam, the head writer and founder of the frugal living blog Cheapsters.org, calls herself a big fan of taking her time when buying big-ticket items. As she says, "I create as much friction as possible, or barriers to making that purchase, so I can really mull over my decision to make sure it's the right one for me."

But even Lam admits to feeling the occasional twinge of buyer's remorse.

The truth is, buyer's remorse might be inevitable. There's an actual science behind it.

Avoidance vs. Approach Motivations

The WhoWhatWear blog last year ran an interview with Art Markman, a professor of Psychology and Marketing at the University of Texas at Austin. He told the site that something called the avoidance motivational system is the tool that helps consumers avoid negative consequences such as accumulating large amounts of credit card debt. Say you see a computer that you really want. Your avoidance motivational system might kick in and prevent you from making that purchase if doing so would result in huge charge on your credit card bill that you can't pay off.

Ideally, the avoidance motivational system would encourage you to, say, save up enough money so that you could pay off that credit card charge in full at the end of the month.

Markman, though, told WhoWhatWear that there are times when the avoidance motivational system is overwhelmed by a second motivational system, the approach system. This system encourages you to get whatever you think will make you happy at a given moment.

When you're out shopping, whether you're looking at big-ticket items such as cars or homes, or smaller items such as clothing or perfume, the approach motivational system will override the avoidance system, causing you to make purchases that maybe don't make financial sense.

Then, when you get home with that new laptop or flat-screen TV, you'll start to feel guilty about spending your money. That's because the approach motivational system loses its power after you've made a buy, letting the avoidance motivational system kick back in, stronger than ever. This leads to that awful feeling of buyer's remorse.

Linda Jones, chief executive officer of Be Wealthy & Smart, an online business and wealth mentoring company, sums it up this way: "Buyer's remorse is a physical reaction to chemical endorphins released in our body. Studies have shown that shopping gives us a rush in our brain, a high. But it only lasts a short time."

And when that rush disappears? Regret over an unnecessary purchase often kicks in.

Jones points to research by Brunel University in the UK saying that shopping is associated with increased activity in the left prefrontal cortex, a part of the brain that is linked to positive thinking and pleasure. The report found that levels of dopamine can rise significantly even if you're just window shopping without planning to buy anything.

Beating Buyer’s Remorse

Jones said that the best way to avoid buyer's remorse is to understand this science and to take the steps necessary to beat it. This means making a list of your spending priorities and following it, even when your brain is telling you to overspend on that new outfit.

For instance, you might decide that your first priority is to spend on your home, your second on food for the week, and your third for any school supplies or clothing that your kids might need. By keeping these priorities at the top of your spending list, you'll increase your odds of resisting that urge to splurge on a sports car that could bust your budget, Jones said.

Others avoid buyer's remorse by going on what Elle Kaplan, founder and chief executive officer of LeXION Capital, calls the all-cash diet: You carry around the amount of cash you've budgeted for the entire week while leaving your credit card at home. This way, even if the chemicals in your brain are telling to you buy something extra, the money in your pocket won't let you.

"Buyer's remorse can leave you with more than a regrettable purchase; it can also lead to spiraling debt and bankruptcy," Kaplan said. "It can be easy to get swept up in the moment and buy that 'must have' big-ticket item while ignoring future consequences."

How do you stave off buyer's remorse?

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