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7 Tricks Stores Use That You Can Avoid to Prevent Spending More

7 Tricks Stores Use That You Can Avoid to Prevent Spending More

It happens to everybody. You make a list, you know exactly what you need, and then somehow you walk out of the store with a mile-long receipt full of impulse buys, stuff you didn’t know you needed, and well-as-long-as-I’m-here items. Think you’re just lacking in self control? Okay, maybe… but it’s not just about you. Stores use all kinds of tricks to get you to spend more than you intended, and lots of them are pretty subtle. They know that thanks to the internet and smartphones, we do our homework — heck, sometimes we even do it right in their stores. That means they’re willing to pull out all the stops to make sure that once you’ve made it through the door, you won’t leave empty-handed. Here is what you can do to keep from falling prey to some of stores’ most common tricks.

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    1. Forge your own path.

    Any store larger than a boutique is generally laid out in a predictable way to help you find what you’re looking for, with clearly demarcated sections. But this isn’t just to help you cross items off your list; research on consumer behavior has had an enormous influence on how stores are set up, meaning all those neat little sections are actually optimized to tempt you by taking you past all kinds of items you don’t necessarily need.

    Retail guru Paco Underhill, who’s consulted for a who’s-who of American businesses, has all kinds of handy terms for these tricks. Ever wonder why milk, butter, and eggs are always all the way at the back of supermarkets and convenience stores? No, it’s not because it makes the refrigerated cases easier to stock. It’s simply to get you to walk all the way through the store to get these staples — which Underhill calls “destination items” — and thus have the opportunity to pass all other kinds of merch. Same thing goes for clothing stores: There’s a reason why basics like denim are always at the back of the store.

    Even more subtle is a tactic Underhill calls “the invariant right.” We tend to walk the same way we drive; in the U.S. we keep to the right not just on the road, but also on escalators, jogging paths, and pretty much everywhere, including stores. In Underhill’s research (which includes extensive amounts of video documenting how shoppers move through stores), people in the U.S. nearly always turn right when they enter the store (we keep saying “in the U.S.” because in countries where people drive on the left, like England, yup, shoppers totally turn to the left when they head into a store). This means that stores place items that they want to move in exactly this sweet spot, usually about 30 feet in from the door (an area Underhill calls the “decompression zone”). For example, think about Target. What are almost always the first merchandise areas you see? Seasonal items (right now, bathing suits, sprinklers, pool noodles, and other summer gear at full price) and their “dollar spot.” The dollar spot is full of $1-$3 items which seem like deals (so cheap!) but are pretty unlikely to be items you actually came in looking for (e.g., a plastic contact lens case that looks like an owl). But once you’ve started buying, you’re more likely to keep buying… after all, you have to wait in that line anyway.

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    Outwit the stores by shopping not only with a list, but with a plan. You don’t need to draw an actual map of the store, but if it’s anywhere you visit often, you probably have a basic mental map of where things are. Headed to Target to stock up on paper towels, or to replace a lost TV remote? Instead of drifting to the right and straight into the heart of the “decompression zone,” head purposefully to where the stuff you need actually is. Not sure where that would be? Ask a salesperson instead of hunting for it yourself.

    2-grocery-lyzadanger
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          by  lyzadanger

        2. Look up and down.

        This sounds so simple, but it’s a key way to save money at the grocery store, where food and product manufacturers pay big bucks to get prime real estate in the middle shelves. Why the middle? Yes, it’s where most adults tend to look — we’re used to expecting the big brands to be there — but more importantly for food sellers, it’s also eye-level for kids (little ones riding in the shopping cart and bigger ones walking on their own). Researchers at Johns Hopkins found that children can be highly influential on parents’ purchases due to what they termed the “nag factor.” Kids see brands or characters they recognize, or even just colorful packaging, and they’re likely to ask for the product (or if it’s within reach, just grab it). When parents balk, that’s when the meltdown begins. Wanting to avoid a major tantrum is often reason enough to skip the coupons, ignore the shopping list, and just buy whatever full-price, premium-maker item is making little Billy or Susie turn purple. Retailers and manufacturers are well aware of the sway kids have over parents’ purchases (especially dads, according to the same researchers), so the priciest stuff is invariably on those middle shelves.

        With or without kids, shop smarter — and cheaper — by looking up and down at the grocery store. Foods are generally organized in vertical stripes of comparable items. The lesser-known brands and the generics aren’t in the running for prime shelf space, so they’re more likely to be displayed on the higher or lower shelves. Yes, you may have to bend or stretch (potentially putting you at risk of the shopping deterrent Paco Underhill has dubbed “the butt-brush factor”), but it will help you to legitimately comparison shop instead of just defaulting to the big-name item that’s right in front of you.

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          3. Do the math to get the real price.

          There’s a reason so many prices end in “99.” Marketing researchers call it the “left-digit effect.” Studies have consistently found that in comparing the values of similar items, shoppers believe they are getting a better deal when they buy something that’s this “just below price” than for a similar item that is a “round price” ending in 00. The effect is so strong that items ending in .99 or .95 can outsell comparable items that are actually cheaper but have a price ending in .00. That’s not all: A pair of researchers from Clark University and the University of Connecticut have also posited a “right-digit effect.” They found that when shoppers saw regular and sale prices with identical left digits (so say it was .99 either way), they perceived there to be a larger discount when the right digit was less than 5 than they did when it was greater than 5. This means that even when something is less discounted — say a flat-screen TV that was on sale for 10% off at $429.99 — it might seem like a better value than something that is actually a more substantial discount (like another flat-screen TV with a 25% discount that costs $549.99).

          While for lower-cost items this matters less, for high-end goods like that flat-screen TV it can make a big difference. The incentive to save can feel more intense, not just because that’s a big chunk of change, but because retailers will often impose scarcity (e.g., you need to be one of the first shoppers in the door on the big holiday weekend to grab one of these!). This is all the more reason to do the research and figure out what’s really a good value. Research prices and features before you head out to the store. Already there and feeling the rush of a potential bargain? Use a price check app like The Find, ShopSavvy, or ScanLife (all available for iOS and Android) to compare the price you’re seeing in the store with local brick-and-mortar and online options.

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            4. Don’t buy more than you can carry.

            If you live in a big city and don’t own a car, this is a no-brainer — no one wants to be that jerk trying to cram into a crowded subway car with a bunch of giant boxes. But if you’re at a sprawling big box store, it’s all too tempting to grab a cart while you cruise through the maze of aisles. Once you’ve got that cart, well, it’s pretty easy to fill it up. Shopping carts these days are super-sized (the average one has ballooned more than 40% since they were first invented back in the ’30s), making it easy to load up on all kinds of non-essentials. Aristotle believed that nature abhors a vacuum, and retailers know that shoppers do, too: Give ’em something big enough to tote it all, and they’ll fill it up.

            To make sure you’re not just tossing items in to fill the void, skip getting a shopping cart unless you know you’re buying an oversize item or you’re specifically making a big trip, like a weekly grocery run. For smaller errands, forego even the basket and just pick up what you need. If it’s not worth juggling while you’re waiting in the checkout line, you probably don’t need it.

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              5. Don’t be drawn in by deals.

              Here’s a totally obvious statement: People love deals. Researchers have shown that when shoppers think they’re getting a deal, it’s not just about the money; there’s also a deep sense of satisfaction that folks who study retail marketing call “smart shopper feelings.” Scoring a deal doesn’t just gratify your ego (“I’m a savvy shopper!”), it also gives you warm fuzzies and a feeling of fairness. Remember a couple of years back (2011, to be precise), when J.C. Penney announced they were getting rid of sales and coupons, and would instead offer “fair and square pricing” at all times? Chances are you don’t, because that was a spectacular failure — in less than two years, the guy who came up with that plan was out, the CEO he’d replaced was back in, and there were coupons and sales once more.

              What made “fair and square pricing” such an epic fail? Another totally obvious statement: People love feeling good. If prices are always the same, you don’t get “smart shopper feelings” — in fact, you might feel like the retailer is taking advantage of you. In reality, the opposite is more likely to be true. Stores use all kinds of tricks to get you to buy more than you really want (or to buy things you didn’t even want to buy in the first place!) by offering deals. For example, think of all the items that are priced lower if you buy more than one. A single pair of basic panties at Victoria’s Secret costs $10.50, but somehow, if you buy five pairs, that costs $26.50. If buying five costs just over twice what two should at “regular price”, why on earth would you buy just one? Well, you wouldn’t — which is how Victoria’s Secret makes sure that every time a gal doesn’t feel like doing her laundry, she’ll drop nearly 30 bucks there instead of just over 10.

              If you’re reading this, you probably want to avoid spending more, and yes, looking for sales and deals is one way to do this. The key though is to do a quick gut check before you whip out your plastic. Is this something you actually need? Will you really wear it? And if you really want to push yourself, do a little thought exercise: What are three outfits I could wear this with? What are three times this month where it would have been handy to have this? You don’t have to swear off sales for good, you just want to be sure that you’re not just getting a deal for the sake of getting a deal.

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                6. Never shop on an empty stomach.

                You often hear that it’s a bad idea to go grocery shopping when you’re hungry: If your stomach’s growling, you can find yourself salivating like Pavlov’s dogs at products that are not even remotely on your list (ooh, stroopwafels!). But it’s actually a good plan to have a full belly when you’re shopping, period. Why? Brick-and-mortar stores get that shopping is a sensory experience; the ability to see, touch, feel, and smell what you’re buying makes you more likely to whip out your credit card and buy something that you might waver on if you were shopping online. But it goes beyond that — retailers are constantly coming up with new ways to stimulate your senses. Researchers from Penn State and the National University of Singapore found that when shoppers experienced pleasant “ambient stimuli” that created a cohesive lifestyle “servicescape,” they were more likely to enjoy shopping and to make impulse purchases. A great example of this? Anthropologie, where one of the first things you notice upon entering is the aroma of burning votive candles in scents like “Baltic Amber” and “Santiago Huckleberry.” Before you know it, that $88 peasant top and $168 throw pillow don’t seem like splurges — they feel like vital components of your new upscale bohemian lifestyle.

                Even at stores that don’t sell anything edible, scent can trigger your emotions, leading you to spend way more than you intended. How to avoid it? First, shop when you’ve already eaten: If you’re feeling satisfied, you’re less likely to respond to scent triggers. For bonus points, beat them at their own game by chewing minty gum or wearing peppermint lip balm. Peppermint has been shown to trigger feelings of satiety, and by having that strong scent right below your nose, you’re less likely to notice the store’s scent.

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                  Creative Commons Attribution 2.0 Generic License
                            by  y entonces

                          7. Make your own playlist.

                          Speaking of “ambient stimuli,” another major way retailers get you feeling spendy is by setting the mood with music. Researchers have found that, like scent, creating a “cohesive” environment with music can spur an emotional reaction that helps you envision a lifestyle — and how that item in front of you would totally fit with it. For example, French researchers found that customers in a flower shop spent significantly more when love songs were played in the background. In contrast, playing non-romantic pop music had the same effect on sales as playing no music at all — neither made much of a difference. A terrific example of this is H&M, which offers not just “fast fashion” but fast, loud music. At a store like H&M, pumping in Rihanna dance remixes serves a number of purposes. One, loud, youth-oriented music signals that this store is for young adults — if it’s too loud, you’re too old. Two, the beat keeps you moving, or at least feeling like you’re moving, which is key in a place with notoriously long lines for fitting rooms and checkout.

                          Shop to your own tune by popping in your earbuds. If you’re really serious about it you can make a shopping playlist, but really you can listen to just about anything — music, an audiobook, a podcast — so long as you tune out the store’s siren songs.

                          Featured photo credit: Andrejs Zemdega via istockphoto.com

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                          Published on May 7, 2019

                          How to Invest for Retirement (The Smart and Stress-Free Way)

                          How to Invest for Retirement (The Smart and Stress-Free Way)

                          When it comes to stocks, I bet you feel like you have no idea what you’re doing.

                          Everyone who’s not a financial expert has been there. I’ve been there. But, time is passing and you need to be crystal clear with how you’re investing for your retirement.

                          Otherwise, it’s back to work until you can afford not to. So, how can you invest for retirement when you’re not a financial expert?

                          You take the time to learn the fundamentals well. If you do, you can grow your wealth and retire happy. The best part is that you don’t need to be a financial expert to make smart investment decisions.

                          Here’s how to invest for retirement the smart and stress-free way:

                          1. Know Clearly Why You Invest

                          Odds are you already know why should invest for retirement.

                          But, maybe you know the wrong reasons. It’s time you get clear on why you’d like to retire. Here are some questions to help you get started:

                          • Will you spend more time with your family?
                          • What does retirement mean to you?
                          • Are you looking to launch that business you’ve been holding off for years?

                          Everyone wants to retire but not for the same reasons. Once you’re clear for why retirement is important for you, you’ll focus on making it happen.

                          Investing in the stock market allows you to take advantage of compound interest.[1] All this means is that your money earns money on top of its interest. A reason why investment in the stock market is one of the best ways to plan for retirement.

                          2. Figure out When to Invest

                          “The best time to plant a tree was 20 years ago. The second best time is now.”– Chinese Proverb

                          It’s true if you’d had started investing when you were 10 years old, you’d have a lot more money than you do today.

                          The reality is that most people don’t start investing until it’s too late. So, if you’re currently waiting for the perfect time to start an investment, it would be today. Open your calendar and block out 2 to 3 hours to choose how you’ll invest for retirement.

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                          A quick way to get a snapshot of where you stand is to use Personal Capital. Input all your personal information and spend some time setting your retirement goals. Once completed, you’ll know where you stand with your retirement.

                          Having a savings account for retirement isn’t planning for retirement. Why? Your money loses value when you factor in US inflation.[2]

                          3. Evaluate Your Risk Tolerance to Create the Perfect Portfolio

                          Investing your money well depends on your emotions.

                          Why?

                          Because when the market drops most people panic and withdraw their money. On average, the US stock market yields an annual 6% to 7% ROI (return on your investment.) But, this won’t happen if you’re worried about short-term loses.

                          Before you invest your next dollar, know your risk tolerance.[3] Your risk tolerance determines the number of risky and safe investments you’d have.

                          Regardless of your investing style, you need to view investing for retirement as a long term game. Know that some years you’ll lose money but recoup this in the long-term.

                          Avoid watching market-related new. Also, create a double authentication to log in your investment account. This way you’re less likely to withdraw your money.

                          4. Open a Reliable Retirement Account

                          Depending on your circumstance, you may need to open a new brokerage account. This is the account is where you’ll invest your money.

                          If you’re currently working for a company, odds are that they offer a 410K investing account. If so, here’s where you’ll invest most of your money. The only problem with this is that you’re limited to the stock options that are available.

                          You do have the option to open a separate IRA (individual retirement account.) Here are some of the best brokers:

                          1. Vanguard
                          2. TD Ameritrade
                          3. Charles Schwab

                          5. Challenge Yourself to Invest Consistently

                          Committing to invest for retirement is hard, but continuing to do so is harder.

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                          Once you’ve started investment for your retirement, you run at risk from stopping. Often you’ll want to contribute less, so you’d have more money in your pocket.

                          That’s why it’s important that you create a budget that allows you to invest each month. If you’re working for a company, you can set a percentage for the amount you’d like to contribute each month. Most people by default contribute 1% but aim to contribute 10% to 15%.

                          Be the judge for how much you can afford to contribute after covering important expenses. To stay motivated, use Personal Capital to view your net worth.

                          A benefit to contributing money to your retirement account is not taxed. For example, if you earn $100 and invest 10%, you’d contribute $10, then get taxed on the remaining $90. As of 2019, the most you’re able to contribute towards your 401K is 19K but this can change.

                          6. Consider Where to Invest Your Money

                          The most common way to invest your money is in stocks, but it’s not the only way. Here are other ways to invest:

                          Robo Advisors

                          Robo-advisors[4] are fancy algorithms that’ll choose the best investments for you. Sites like Wealthfront make it easy for first-time investors to invest their money. You’d input information about yourself and set your risk tolerance.

                          Then, set your monthly contribution amount and your robo-advisor would do the rest. Robo-advisors charge a fee to manage your money, but less than regular advisors.

                          Bonds

                          Think of bonds as “IOUs” to whomever you buy them from.

                          Essentially, you’re lending money and charging interest. Like stocks, not all bonds are equal. Some will be riskier than others depending on their rating.

                          Here are the different types of bond categories:[5]

                          1. Treasury bonds
                          2. Government bonds
                          3. Corporate bonds
                          4. Foreign bonds
                          5. Mortgage-backed bonds
                          6. Municipal bonds

                          Mutual Funds

                          Picture a group of people dumping all their money in a jar that’s managed by a professional. This is how mutual funds work. The fund manager manages the money looking to earn capital gains (interest.)

                          One of the best types of mutual funds is index funds. Since these funds don’t try to beat the market and instead follow it, they need less research. Because of this they often charge the lowest fees and yield the best long-term results.

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                          Real Estate

                          Yes, buying a home is an investment when done correctly.

                          Imagine buying a home and using it as a rental property. After repairing it, you receive a monthly surplus check of $100 to $200.

                          This may not sound like a lot, but repeat this process enough times and you’d earn a large amount of passive income. That’s why real estate is one of the best investments to not only retire but become wealthy.

                          But, it requires a lot of money to start and you should expect losing money along the way as you learn the process.

                          Savings Accounts

                          Your money can still grow in a savings account. Nowadays most online banks offer a 2% annual return. Although the average inflation is higher your money will be available when you need it.

                          7. Master Disincline to Dodge Short Success

                          Investing for retirement is a long-term strategy. That’s why you need to master delayed gratification. All this means is delaying short-term pleasure for something bigger in the future. Research shows that those who have delayed gratification are more successful.[6]

                          So how can you master delayed gratification?

                          By building your discipline.

                          Think back to what retirement means to you. A clear purpose will help you avoid withdrawing your money during a market downturn. It’ll help you contribute more towards retirement when you’d want to waste it instead.

                          Your journey towards retirement will be long, so reward yourself along the way. Choose a reward that’s relevant and meaningful, so that you reinforce positive behavior. For example, after contributing more towards retirement, treat yourself to dinner.

                          8. Aggressively Invest on This One Investment

                          I’ve mentioned several types of investments but haven’t covered the most important one.

                          It sounds cliche but here’s why you’re your best investment towards retirement. The more you know, the more money you’ll be able to make. The more good habits you adopt, the more secure your retirement will be.

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                          More importantly, investing in yourself is an investment that no one can take away. There’s no market downturn nor tragic circumstance that’ll wipe your knowledge and experience.

                          But, how can you invest yourself?

                          Reading books, blogs, and anything that’ll help you learn new topics daily. Listen to podcasts and audiobooks on your commute to/from work.

                          Save money to buy courses and hire coaches. I used to believe hiring coaches was a waste of money when I could learn the subject alone.

                          But, coaches see your blind spots and hold you accountable. Hiring the right coach will help you achieve your goals faster than you would’ve alone.

                          Retire Happy with Excess Money

                          The key to a secure financial future doesn’t only belong to financial experts.

                          It’s possible for you and I. What if you were able to retire earlier than most people and weren’t a financial planner? What if you were able to focus on what you enjoy doing the most while your money was working hard for you?

                          I know this sounds impossible now, but the truth is you’re capable of taking charge of your retirement. I’m not a financial expert but I’ve learned how to invest my money by reading books and learning from others.

                          Investing your money is scary. So start small and invest a small amount of your money with a robo-advisor. Feel your money drop and rise for a month or two. Then, invest more and keep this up until you’re aggressively saving for retirement.

                          One day, you’ll wake up with a net worth you’re proud of – confident about your retirement. You now know a few strategies you can use to invest in your retirement. Will you take action to retire happy?

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                          Featured photo credit: Matthew Bennett via unsplash.com

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