How Psychology Can Play Tricks to Your Savings Accounts

Are all your actions really under your control?  You’re losing money; it’s beyond your control.  Would you like to change that?

Are we manipulated by the psychology of situations and our own makeup?  Like hypnotism, can businesses play tricks with our minds and savings accounts?  They (at least) try.  Many of them succeed.

Would you like to know some examples of business ‘tricks’ of the trade?  Perhaps better awareness will promote better savings.  Are you interested?  You likely are.  Some psychology was employed in this introduction…

Image courtesy of 401(K) 2012 from Flickr

No Zeroes

There is not a monetary difference between 779 and 779.00; yet the latter facilitates more psychological ‘noise.’  We don’t like noise.  There’s too much information to be dealt with.  Without knowing, we gravitate toward less noise and the former physical presentation of price.

$779 doesn’t look like seven-hundred and seventy-nine dollars; but it still costs the same.  Taking out zeroes (and commas and decimal points) makes the price more appealing, but costs the same.

Psycho Sound

We gravitate toward less visual noise; we also desire less internal monologue noise.  For instance, the number seven has two syllables.  Whether we’re cognizant or not, we ‘say’ it in our minds when we see it.  Seven is more laborious to ‘sound’ than other single-digit numbers, which (other than zero) have only one syllable.  Many advertisers purposely avoid sevens for that reason.

One Hundred or One Dollar?

A price of $799 is just one dollar away from $800.  But businesses understand perception.  If a competitor’s price is $815 and people are conditioned to think in single digits, then 8 is always more than 7.  Most consumers would agree a mere $15 is not a great reason to decide on one brand over the other (when making a purchase of $700 or more); yet it happens more than we realize.

Playing On Emotion

When the notion of losing money beyond your control was mentioned in the introduction, did that affect you?  It’s likely.  The notion played on your emotions.  We all have them.  Advertisers are very aware of that.  Entire holidays, such as Valentine’s Day, bank on them.  (Do you really need a ‘holiday’ to express love?  Of course you don’t!)  The next time you move to get out your wallet, think about ‘why’ you’re making the purchase.  Is it an emotional reflex or a sound, rational decision?

Time Sensitivity

What did you do last Saturday night?  You stayed in?  Did you get a creeping feeling you ‘missed out’ on something?  You have no idea what that ‘something’ was.  Maybe it was doing something displeasing; but you don’t know.  The not knowing, the notion of possibly ‘missing out,’ bothers us.

Attaching time sensitivity to consumer decisions creates such notions.  Opportunity awaits…BUT YOU NEED TO ACT NOW!  That throws us off; that makes us make hastier decisions; we’re rushed; but we definitely don’t want to ‘miss out.’

Irrational Rational Desires

We all have desires, whether it’s to be stronger, to be prettier, to have a better job, etc.  Having desires is the rational part.  The irrational part is believing some products/services can help attain them.  In part, some products/services such as weights, makeup, and consulting can help; but we musn’t confuse the theoretical with the practical.

Advertisers paint a theoretical picture, using rational desires as a basis, hoping consumers will make ‘irrational’ connections between the theoretical picture and the respective product/service.  Can drinking milk improve health?  Yes.  Do pretty girls like healthy guys?  Yes.  Can drinking milk get you the pretty girl?  No, not necessarily.

What Now?

‘Business’ has an agenda.  It wants your money.  There’s no reason to fear; but there’s reason to be smart, understanding the psychology of consumerism.  Understand there are plenty of goods and services worthy of your money; but don’t be a slave to sales implementations.  Be a psychologically savvy consumer.

About Author | Amie is a freelance finance advisor, writing for sites like Fair Investment Company – a savings accounts comparison site. In her spare time such she enjoys comparing fixed rate bonds, instant access savings accounts and other high interest accounts.

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