Readers may have noticed that this blog does not major on frugality tips.
That’s because articles based on frugality tips are a bit dull. Tesco’s may or may not have cheaper baked beans than Morrisons this week, but who wants to read about that?
This does not mean that The Escape Artist is above saving a few pence on baked beans. Not at all – the Escape Artist practices The Aggregation of Marginal Gains.
But rather than focus on penny-pinching on beans, the trick is rewire your operating system so that you naturally save every time you face a spending decision. We face hundreds of potential spending decisions every week, so its in the aggregation that the big money is made.
There are other websites out there that focus on discounts and clipping coupons. I use MoneySavingExpert.com to save £££s on utility bills and finding the best savings rates. All worthy stuff to which I don’t have much to add.
Instead, I focus on the underlying psychology of why people waste so much money. We are trying to address the causes of ridiculous spending rather than just the symptoms. So let’s focus on what actually makes us happy and ditch consumerism. After that the urge to spend melts away.
At some point in the twentieth century, we swallowed the strange idea that shopping is a leisure activity. The Escape Artist has never been that keen on shopping. There is something a bit sad about seeing debt junkies and Walking Wallets castrated and dragged around shopping centres on invisible leads.
But we all want stuff at some point. The question is therefore how to get stuff without being ripped off.
I think of shopping as a Tom and Jerry style cat and mouse game between you and the retailers / marketeers. In this analogy, you are the mouse and they are the cat. They are bigger and better resourced than you are. They are happy to toy with you and then eat you for their own profit.
Yet, despite your size disadvantage, you can win this game by playing it on your own terms. You can choose where and when to engage with the enemy. So why would you ever go shopping where The Man controls the environment? In the bad old days, the answer was that we had no choice. If you wanted stuff, you had to go to the shops.
One thing we all had to buy was food. Supermarkets got bigger, new product lines, restaurants and coffee shops were added. They created an environment optimised for spending. What could be easier than gliding around the store, senses dulled by the piped music and overwhelming display of material affluence?
How easily we are lulled into a sense of security and then tricked into dropping a book or some plates or some clothes into our trolleys. Supermarkets invest huge amounts in data analysis and exploiting our psychology to sell us more shit. From the bread baking smells piped into the store to the sweets placed at child height at the tills, they are fucking with our heads.
But capitalism is a dynamic process and industries often sow the seeds of their own destruction. About 20 years ago, supermarkets started to offer home shopping and delivery which was a terrible idea for them and a fabulous development for you and I. Now, thanks to the internet, you need never step foot in another supermarket. Like an A List celebrity, you have people that do that shit for you….but at no extra cost!
Most shops are dismal places full of suckers being manipulated by consultants, CEOs and marketeers. If you have to buy something, so be it but that is no reason to actually physically spend time there. Buy it online and use price comparison to unleash the deflationary power of the internet. This gives you an edge just like your favourite football team would have an edge if it could play all its fixtures at home.
Shops now realise that you don’t need them so they have re-engineered themselves to provide a sense of theatre and a shopping “experience” to trick you into thinking that they are a destination, shopping is a leisure activity and that a better lifestyle can be bought.
Last summer, I was hanging around Central London killing time waiting for a mid-morning meeting in an upscale street in Mayfair favoured by hedge funds, art dealers and other providers of…ahem…non-essential services.
I was struck by loud music coming from a doorway entrance. I wasn’t sure what this was but my curiosity was sparked. Inside the entrance there were 2 beautiful people – a female and male model. It was a hot day and they were not weighed down with an excess of clothing. The girl was wearing a smile, a tube top and what used to be called “hot pants”. The guy was wearing only a pair of distressed jeans and sporting a well-defined six pack. They greeted me and waved me inside.
I fought back my default reaction to sprint in the opposite direction. Instead I thought of the potential blog material, my journalistic duty to you the Readers and I entered the Dragons Lair.
Inside, I discovered that the venue was a clothes shop, not a bar or model agency. The interior was like a nightclub – it was dark (presumably so you couldn’t look too closely at the clothes), the music was pumping and various retail hosts were swirling around like attractive vampires, preying on the weak minded customers.
The Escape Artist’s Bullshit Geiger Counter started to crackle loudly. The readout on this always spikes up in retail environments but I had never before seen it go up to 11.
The shop was purveying velour trousers and other essential leisure wear by associating it with a Southern Californian surfing lifestyle. Now don’t get me wrong, I’m all in favour of surfing. Its just that I don’t agree with the implication that buying these clothes would improve the customers ability to ride the Green Room, achieve phat air or do whatever surfers do.
I walked around the store gobsmacked by the absurdity of it all until one of the female vampires approached me, looking to prey on my evolutionary psychology. Frankly, I wasn’t sure at this point that our fledgling relationship was built on solid foundations. I suspected she may only have been interested in me for my money. It was almost as if she didn’t care what a special and unique snowflake The Escape Artist is. So I did a runner and legged it out the door.
Back out on the street, I checked my wallet was still there and there were no puncture wounds in my neck. As my pulse started to slow, I marvelled at the Emperors Clothes chutzpah of it all – so obviously designed to mug customers trying a buy a dream lifestyle through over-priced leisurewear. Which, I guess, seems easier than saving their money, laying off the doughnuts and actually going surfing.
Note the ridiculous cost and inefficiency of the delivery mechanism. The West End rent and rates. The excess number of employees whose main job is to seduce not to stack the shelves. The hip music and the nightclub decor. The inflated cost base is of course recovered via the price premium versus unbranded product bought online.
With the internet, you can buy stuff from home, never directly exposed to the retailers mind tricks. Their evil superpowers don’t work if you are not geographically present. You are never hurried, never disorientated by the music, peer pressure or an intimidating air of hipness.
Here is my checklist I run through before buying a new gizmo:
- Why do I want this product? What real need is it meeting? Will it really make me more popular or better looking? Am I trying to fool myself by throwing money at a problem for which money is not really the answer?
- Do I still want it a week later or has the moment passed and the urge disappeared?
- Can I rent, borrow or barter it?
- Can I buy it second hand from Amazon / Ebay / Craigslist / Freecycle, thereby using an existing resource more efficiently?
- If I really want to buy it, when is the best time to buy it and from where?
I joined a cycling club before Christmas and they ask riders to wear helmets. Rather than immediately jumping in my car, going to a shop and being upsold, I paused. By waiting a week or so I was able to buy it online in the clearance sales on Boxing Day. I got 55% off the previous list price. The helmet was brought to my door a few days later by a cheerful postman (I’ve never met a postie that wasn’t cheerful). No shop visit required. Compare and contrast with the surf wear retail experience.
Whilst online I saw I could easily have paid 20x more for other helmets, with no obvious additional safety benefit. In micro-economics, students are taught the nice notion of perfect competition with an identical product, no transaction or search costs, many equally well informed buyers and sellers all acting rationally in their own interest. In this theoretical world, every cycle helmet will retail at around the same price. This is The Law of One Price.
In the real world, with status brands, imperfect information and plenty of consumer suckers, the law of one price does not apply.
These days, you choose how much you pay for most goods. You can make that choice on your own terms.