Researching Purchases


Every person makes hundreds of purchases every month. Think about how many individual items you choose when buying groceries, how often you eat out or use a vending machine, or how often you buy new clothes. Each purchase has a reason, but each purchase costs money.

One of the cornerstones of strong personal finances is knowing why you buy what you do and knowing how to research your purchases in advance.

Why We Buy What We Do

Coke or Pepsi? Large coffee or medium? Prepare your own bag lunch or go out to eat? You will make thousands of tiny decisions every month about how your paycheck gets divided.

It is not possible to carefully consider every single purchase you make.  This would lead to decision fatigue. Decision fatigue happens because every choice you make takes some brainpower. As you spend more time and effort considering each choice, you will get worn out very quickly.  This is why most people spend a lot more time researching “big ticket” purchases than every item in their grocery cart.

Once you break down your spending with a spending plan, you will see that all your minor purchases add up very fast. That’s why it is important to understand why you make each of those small purchases.

Advertising and Spending


You are susceptible to the effects of advertising.  Everyone is. Most people think advertising does not really affect them much, but no matter how savvy you are, you will be affected by ads.

When you are deciding whether or not to buy a product, you already have some pre-formed opinions about what benefits you will receive compared to the price you are paying. Where did those pre-formed opinions come from? They came from several prior experiences you’ve had that allowed you to interact with the product in rational and emotional ways.  Advertising was at work.

A successful ad is able to do three things.  First, it attracts your attention.  Bright colors, interesting people, music, humor, bold words, and familiar experiences are all at work to capture our attention. Next, the ad gets the name of the product stuck in our heads somehow. Third, advertisers put a positive spin on their products to convince us that this is something we truly want or need.  A good ad is able to hook your emotions and bypass your brain. Then when you see those products while you’re shopping, you are more likely to make impulse purchases rather than comparing products and choosing the one with the best value. 

Advertising has the biggest impact on our smaller purchases, where we only spend only a few seconds weighing pros and cons. A simple product endorsement from a social media website may be the reason you buy Product A instead of Product B. 

Previous Experience

Our own previous experience is the opposite of advertising.  We have used a product previously, and so we know exactly how well it works and the value it brings relative to cost. Smart shoppers should not rely solely on previous experience to make purchasing decisions.  Buying certain products out of habit means you are not taking time to compare one product to other available alternatives. 

Most of us have an older relative who has used the same products or visited the same restaurants for the past 30 years, even though newer, better alternatives are now available.  This happens because shoppers fall into spending ruts, where a positive previous experience has switched off the part of the decision making process where you consider alternatives.

Peer Pressure


When it comes to spending, peer pressure is not always a bad thing. Peers will share their personal experiences with a product or service, allowing you to gain knowledge of what you are buying before wasting your money. Getting a product endorsement from someone you trust is one of the best ways to feel the benefit of the product is worth the price.

On the other hand, peer pressure can also encourage over-spending. If you have more than a couple of friends, once they know you are shopping for a particular product, chances are you will get recommendations from each of them. Each may claim that different products are well worth the cost and the investment. Each friend might be right, but even if they are, buying more items just because they were recommended can really hurt your budget.

Think about watching TV shows.  You might have 4 different friends, each recommending a different TV show, which takes ½ hour to watch one episode. If you take the advice of all 4, you’ve already dedicated 2 full hours to watching TV, before you even get to the shows you privately wanted to catch up on!

How to Spend Your Time Researching

Researching purchases is mostly a time problem.  There are thousands of purchases to consider, but only one of you and only 24 hours in a day. Thankfully, there are some tools that can help with your research, making the process easier for you. 

Use Your Spending Plan or Budget


Before you make any purchase, your need to first decide what money you actually have to spend.  If you have created a budget or spending plan, this usually means looking at what you spent last week or last month and using those dollar figures as a starting point.

Next, decide if you can spend less on future purchases without missing out. For example, you may prefer name-brand products or getting your coffee to go instead of brewing it yourself, but could you save money simply by making small changes?  You might prefer that extra cash at the end of the month more than the drive-thru coffee you purchase in the mornings.

Conduct some personal research to determine how much each item is really worth to you. Try decreasing your grocery or clothing budget by a few dollars each month.  With less money allocated for these purchases, you may be forced to spend an extra few seconds thinking about each item that normally goes into your shopping cart.  Sometimes this is all it takes to save a lot of money in the long run.

Compare Online as You Shop

Most people today have a smartphone with full internet connectivity. If you are shopping at a brick-and-mortar store purchasing items that cost more than $20, it may be well worth your time to do a quick online price-check for those items.

This online price-check provides two major advantages.  First, you will see instantly if you can find the items at a cheaper price somewhere else. If the purchase can wait a few days, you can order online and save money. Second, online shopping sites usually provide user reviews from other people who have purchased certain products. These reviews will educate you on the product’s actual quality, how long it will last, and problems other customers have experienced. 

Delay Purchases

If you decide you want to buy something, there is a simple trick to help you save a huge amount of money.  Delay the purchase.  Simply do not purchase the item as soon as you’ve made up your mind that you want it, even if it is on sale.

Have you noticed when you’re shopping online for certain products that advertisements for those products seem to “follow” you around the internet? Ads for those new shoes you were looking at seem to appear in your email, your news feeds, and in your social media websites.  Let those ads do some of the research for you! When you find an item that you want but do not buy it right away, the ads that are following you will now be showing you some alternatives.  These alternative retailers or products might have better prices or better reviews that you did not see during your first round of research. The biggest advantage in delaying purchases comes by simply cutting out impulse purchases entirely. According to the BBC, most shoppers waste about $800 per year on impulse buys for products that they never really use and never needed in the first place. Delaying your purchase by a couple of days kills that impulse.  By delaying the purchase and killing the impulse, you just saved yourself the entire purchase price, plus you don’t have items around your house that you really don’t need.

Be Wary of Sales and Bundles

A shopper recently purchased a laptop from a major electronics store. It was purchased at a competitive price, was well-researched, and had all the desired specs. At the check-out, the salesperson offered a bundle.  The store would offer a full set-up of the laptop, complementary antivirus software with a 1-year subscription (which the store sold separately for $70), and a 1-year warranty for accidental damage, all for only $60.


This bundle exists at most electronics stores, with similar terms, but it really does not offer much more than simply an increase in cost. The bundle is offered at check-out specifically to give the buyer little or no time to research the purchase before having to make a decision.  This should raise a red flag for shoppers.  In reality, no part of the bundle was a good deal.

  • There is no real “set-up” process for new computers anymore. Just entering your name and logging into your home’s Wi-Fi is usually enough to get up and running.
  • Almost every new computer comes with a “trial” version of professional antivirus software, which lasts as long as the membership period offered in the bundle. The Windows operating system now includes its own built-in antivirus protection, known as Windows Defender.  And free versions of almost every other reputable antivirus exist for extra protection. Apple computer products also have their own free suite of antivirus software to choose from.
  • The accidental damage warranty offered by the store was almost identical to the one already included by the manufacturer of the laptop, providing no additional benefit to the customer.

You can find a similar story behind almost any bundle ever offered at check-out. If you are being offered a bundle deal without being given time to do proper research on what you are buying, you will be better off by opting out and sticking with the purchase you have already researched.

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Challenge Questions

  1. Why is it important to consider comparison shopping?
  2. Other than price, what other factors should you consider before purchasing something?
  3. With the use of examples, what do you understand by peer pressure?
  4. With your understanding of opportunity cost, how does this apply to purchases?
  5. How might delayed gratification and delayed purchases help you with your budgeting?

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