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Black Friday + Cyber Monday = Broke Tuesday

The Think Forward Initiative would like to encourage you to ‘think forward’ this Black Friday weekend. Make sure that you spend wisely and don’t forget about your long-term savings goals.
Posted on November 28, 2019

This Black Friday weekend is set to be one of the biggest spending weekends of the whole year, with Germany and the UK predicted to be the highest spenders in Europe. But have you really thought about why these big sales bring so many of us to spend unnecessarily?

Ariely and Kreisler argue that this lack of consideration for so-called opportunity costs "is our biggest money mistake and the reason we make many other mistakes" (Ariely and Kreisler 2017). So this weekend be more considerate of your purchase decisions and don’t fall victim to these sales lures.

Last year, the Think Forward Initiative (TFI) worked with Benjamin Timmermans, Monique van Maare and Eva Zinger-Mityok on the research project: "The effect of warnings on irresponsible online purchase behaviour."

The project explains how constant triggers in our daily life, like social media deals, retargeting banners and email marketing are making us “disconnect” from our long-term future needs, like saving for our retirement, saving for your first house or even paying off your mortgage.

And what makes these online sales even more enticing? They minimise the ‘pain of paying’ with features like wallets, one-click ordering and shortened authentication processes. So how can we resist the temptation to buy this weekend, you ask?

Well, Benjamin Timmermans, Monique van Maare and Eva Zinger-Mityok's study aimed to identify if warnings before making a purchase decision could reduce your spending , and if so, which type of warnings are most effective? Guess what? The most effective warning was found to reduce spending by 78% compared to no warning.

The warnings varied from:

  • Mild Warnings: “Are you sure? You may not be able to make any further purchases this month”- This reduced the number of purchases completed from 50% to 34%.
  • Severe Warning: “Warning! You have insufficient balance to complete this purchase”- This warning, while harsh, was the most effective- with only 11% of purchases completed.

So this weekend, why not set yourself a personal warning on your phone, a few times a day, that reminds you of your long term savings goals. As it just might help you keep your eye on the prize and reduce your chances of buying unnecessary items.

To read the full article on the effect of warnings on irresponsible online purchase behaviour, click here.