Living with credit

Distorted memory can trick you into overspending

Kelly Dilworth

If you’re struggling to curb your urge to splurge, you may want to keep better track of your recent purchases. A forthcoming study in the Journal of Consumer Research found that impulsive spenders tend to conveniently forget just how much they spent the last time they indulged.

“When faced with an opportunity to indulge, consumers may be motivated to distort their memories,” write study authors Frank May and Caglar Irmak in the report. That way, they can rationalize a future purchase, without the guilt.

Don't trust your memory to save you from overspending

For example, if you’re shopping for shoes and come across a pricey pair that would nearly blow your budget, you may subconsciously trick yourself into believing you can afford them because your faulty memory remembers spending less than you actually did.

“Impulsive people are willing to pay more for a pair of shoes,” write May and Irmak because they mistakenly believe “they did not spend much of their budget yet.”

According to Irmak and May, people with poor impulse control are especially bad about tricking themselves in order to justify a future splurge. But they only do it when they’re debating a future indulgence. When they’re not faced with an immediate temptation, their memory of a past event — such as a previous purchase — is more likely to be accurate.

Self-disciplined consumers may also deceive themselves, said Irmak and May. But, in their case, their self-deception is more likely to be helpful rather than harmful. For example, frequent savers might subconsciously convince themselves they spent more in the past than they actually did in order to discourage future spending.

“One possible reason for this effect is that nonimpulsive people, who are generally high in self-control, may be employing a counteractive self-control strategy in order to avoid overspending,” write Irmak and May. By telling themselves they spent more than they did, they’re motivating themselves to work harder toward their long-term goals.

Impulsive people, by contrast, may convince themselves they’ve already taken concrete steps to protect their savings, so they can afford an extra treat — just this once.

Inside the study
Irmak and May came to their conclusions after conducting a series of experiments that measured people’s impulse control when tempted and their memories of past events.

In one experiment, participants were asked to imagine they were going on a shopping trip and had an extra $438 to spend. But they were also reminded that they were trying to fatten up their savings, so they shouldn’t spend too much. Participants were then told they spent $93 by the end of the trip.

After completing a series of “filler” tasks, some of the participants were then asked to imagine going on another shopping trip and coming across a pair of shoes they’d love to buy. They were asked to recall how much they spent the last time they went shopping and to estimate how much they’d be willing to pay for the shoes.

Participants who tested high for impulsivity were more likely than other participants to remember spending less than they actually did on the previous shopping trip. They were also willing to spend more to get the shoes. Researchers concluded that this likely occurred because the participants’ desire for the shoes temporarily clouded their thinking.

Your bottom line
Stop yourself the next time you’re debating a new purchase and question your beliefs. You may find you’re engaging in magical thinking in an effort to justify your spending.

It may also help to keep a spending diary so that you have proof of how much you previously spent, say Irmak and May.

That way, you can use your journal to help correct your faulty memory and fight back against your tendency to conveniently “forget.”

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