In this article, which focuses more on psychology, your correspondent will examine the reasons for consumer spending, including tricks that can either be avoided or deployed, depending on your point of view.
Shopping psychology of feelings
Most discretionary spending is based on wanting to feel something: You wish to feel good about yourself, so purchase a delicious drink at a nearby stand. You want to feel happy so buy a new gaming console. This is not your personal fault, it is basic evolution and standard psychology, pulling a trick on you; every human has the exact same desires, they just go about it differently. It is based on the cavemen era, during which scarcity of vital resources, such as food, was a genuine problem.
Tricks
Corporate parties generally utilise these feeling via advertisements and putting inventory on sale. Advertisements feature people who are exceedingly happy with every little thing the company sells, and sales exist to make you feel as if you either got a really good deal (in actuality, you spend money that might have been savings), or are missing out on something vital to survival. They directly target the more automated part of your brain, with feelings of not having what someone else highly values, that you are missing out on something important. Advertisement agencies even specialise in targeting specific audiences, they know exactly what you need to see and fill your screen with it.
Larger firms offer their own in-house financing options, such a leasing or paying in instalments. These serve not only to bind you as a customer, but also to make you buy things you genuinely cannot afford right now. Paying later, also feels less like spending; your mind actually minimises the negative effects of spending. Because spending occurs at a later time, it becomes decoupled from the purchase; you get your dopamine fix, but without a immediate hangover. Breaking a large amount into smaller payments, genuinely makes it feel cheaper to the human mind. Turning a single cash outflow into multiple smaller outflows, also creates the illusion of control; while in fact creating a payment obligation over which you have no genuine control, apart from basic rights to return an item, if applicable. These kind of services serve no other purpose than to reduce the barrier for spending. The entire buy-now-pay-later industry, and most payment platforms, are based on this.
Just ask yourself; do I really want to work this amount of time, for that item.
Tips
The best way to deal with the above discussed bag of tricks is by looking at what you want to purchase and first identify the feeling, followed by either deciding to ignore it or finding a cheaper/pre-existing alternative for it. Reflecting on what you already have could easily replace the need for more of the exact same widget. Plus any food and beverage bought will only last as long as consuming it, so they do not really solve anything. Doing a study of added value before purchasing, or waiting until the current items is fully outdated, generally works.
Besides the cost of purchasing, also think about the physical space occupied by your latest acquisition. All physical items need storage space, which is limited to your house. You also have the mental burden of needing to use the new item, or watch as it sits in the corner. For the advanced group; at some point you will need to toss out the item, so think about how you are going to get rid of it. In some cases maintenance is an issue to be taken into consideration.
Not buying something for at least 24 hours have passed, at minimum a night sleep, can remove literally all impulse buying; for it simply is no longer considered impulse buying. Thinking something over, greatly reduces the chance of a regrettable purchase. A suggestion is to spend the time researching either alternatives or the true need for such an item. During this timeframe, you can remember your long term goals and decide if the planned acquisition is a threat or a boon to your goals. Thinking of other things you can do with the money might be good advice, depending on if you are the kind of person who wants to buy that instead.
One thing to remember; money is a very new concept. A human can understand money as a resource to be used/valued/etc., but for millions of years the first and foremost function of the brain was the struggle for survival. It is this basic instinct that needs to be controlled, every single time you see any advertisement. So don`t feel too bad about having difficulty with not spending money, you are bombarded with challenges.
General psychology
Now we discuss general psychological factors, affecting both consumers and producers.
Consumer
The main goal of arming yourself against companies preying on your savings is separating wants from needs. A need is something that you require to function in a modern day society; food, water, shelter and access to information technology (laptop, electricity, smartphone), etc. Wants are things that you wish to have, but do not really need. A method of separating needs and wants: When a need is fulfilled you do not want something better. If you wish for an upgrade, it becomes something you want. Also, when you get a want, you might want something bigger/better or more of the same.
There also is the two kind of people approach; you either think in shortage or in abundance. The shortage people will want more, for fear of missing out or not having what they need. The abundance people might allow themselves something because they will get more money anyhow and deserve something nice. Both cases can follow the same prescription; decide what you really need and do not buy anything else! Nobody has an unlimited supply of money and grocery stores have managed to stay fully stocked throughout actual border shutdowns.
Producer
The main reason why companies produce new, or more varied, products is competition; the primordial need to come out on top and take control of a large hoard of resources/market share. To achieve such a goal, a R&D department is required to design more products that speak directly to consumers wants and needs.
A different method is making several tiers of the same product; a cheap variant that costs less, and has a low profit margin, plus a more expensive version that costs more beyond what customers pay extra to create it. The consumer will believe the cheaper one to be inferior and aim to buy the fancy alternative. Some products allow for the client to buy a cheap version now and a pricier alternative when they have had a chance to save for it, or when they move up in their lives. The latter is more for fixed assets where the former is more for everyday live kind of articles. You can buy a more expensive car after making that promotion and having bought real estate, but a fancy loaf of bread is possible every time you receive a paycheque. Just putting a higher price tag on a product can achieve this effect, it only has to appear better in the eye of the customer.
Closing argument
Some manufacturers simply want to make the best goods possible, which requires a lot of resources, for which they have to drive sales. To accomplish such a cashflow, they make more affordable versions, for those who cannot afford the full product. This money can be invested in more R&D, to make a better product, creating a circle of progress. Naturally, this does not apply to all companies and some send more money to investors than they invest in the company itself.
This article may seem like a combination of an arms race and corporate parties attempting to trick you into buying something nobody needs, but there is a different side to this: The global economy is based on people spending money. If everybody were to stop spending and start saving, two things would happen. At first, the stock market would sore up beyond any comparison (money stashed in bank accounts is invested by banks). Secondly, after a few months, those pumped up stocks would largely go bankrupt, because people stopped buying their products. During the first few months people buy things they considered necessities from their savings (new laptop and such), after which spending plummets, for no-one needs more than one new laptop.
The overall effect of this would be widespread crisis to the system, which might adapt eventually.
