Liam's best buy this year - shoes by Paul Costelloe
A pair of Paul Costelloe shoes has been my best purchase this year - no question. They cost me €80 back in February. My worst purchase has been a blue shirt, bought in June, which cost me €15, on sale in Dunnes.
I will explain shortly why they were my best and worst purchases this year, but before I do, there is a growing body of research that shows whenever you buy clothes, or any item for that matter, particularly if it’s on sale, that rather than saving money, we could, in fact, be wasting it.
Women are worse than men in this regard because in a study carried out recently, 67% of women admit to buying things in sales they never use, compared to 43% with men.
In the same study, 25% of women, admitted to wasting money on clothes by buying items that don't fit them at the date of purchase.
The sale price they said was just too good to pass up so they buy them with the promise that when they diet and lose weight, they will eventually fit into them; unfortunately, this rarely happens, and the item continues to hang in the wardrobe with the sale tag still fastened to it.
Some other reasons people gave where they bought clothes they never ended up wearing were: the item looked terrible when they put it on at home and they never returned it (30%); their partner didn't like it (8%); some even said the item went out of fashion when they eventually got round to wearing it (7%).
My favourite reason of all however, was when 4% said that the item was so nice they didn't want to mess it up by wearing it.
Most of us will happily wear about 20% of what’s in our wardrobe 80% of the time, when all the time we have new clothes, never worn, just hanging there. It would be an interesting exercise to look at your wardrobe and add up how much you spent on clothes you never wore, and look at how many times you have worn the ones you have.
If you looked at the cost per use of an item, rather than the actual price, you could save yourself a fortune and not be suckered into buying things impulsively, whether they are on sale or not.
I came across a great concept recently where if you buy something, you should give it a value of €1 for every time you use it. So, if you are considering buying a new shirt for say €50 whether it’s on sale or not, you have got to ask yourself, would I wear it 50 times? Because if you didn’t, it would be waste of your money, wouldn’t it? I mean if you wore it just five times, then it is costing you €10 for every time you wore it.
Let me come back to this concept again in a moment because we need something to help us stop wasting money, buying things we don’t need. Because when we see something, we make the decision, whether we know it or not, to buy it in a matter of seconds - 2.5 seconds to be exact.
The reason we make up our mind so quickly is largely down to how we feel at the time. This feeling isn’t to do with the act of owning an item, rather what gives us greatest pleasure is the act of buying it.
Our brain releases a chemical called dopamine which is associated with feelings of joy and pleasure, and for many people buying things gives them those feelings. Unfortunately it soon wears off.
Can you recall ever buying something and thinking you could not have it quick enough, and then a couple of days later, looking at it at home and it means nothing to you?
How to resist this dopamine rush? Well the suggestions generally put forward don’t work - like taking 24 hours over the decision; making a list of pros and cons or even following a flow chart to decide whether to buy something.
In the real world, especially for smaller purchases who is going to do this?
As I just mentioned, I have come across a very good idea that might help overcome all of this and it’s very simple. Before you buy anything, you must first assign a Euro value for each time you use the item you buy.
This is a really good way of assessing potential purchases and if used the right way, could be the thing to stop you from impulse buying.
So, if I see a pair of Levi jeans, for example and they cost €100, the question I will ask myself before I buy them is, would I wear them 100 times? When, I think of those Paul Costelloe shoes which cost me €80 back in February. I reckon I have worn them at least five days each week since, so I would have worn them c. 165 times, so they have cost me €0.48c for every day I have worn them. They are still in great shape, so this daily figure will continue to go down.
Shopping for quality and spending a little more on some items, for me, makes sense. You could initially spend less on something but in the long run you will end up paying more, because you have to replace it. My worst purchase this year was that shirt I bought for €15. I have worn it once and I don’t like it so it has cost me €15 for that one time I wore it – mad!
So, the next time you are considering buying something, rather than just looking at just the price, look at the cost per use as well. Break the cost down to a €1 per usage value, and then decide whether you should buy it or not. It may just help you think twice about spending money on something you end up never using.
Liam Croke is MD of Harmonics Financial Ltd,
based in Plassey. He can be contacted at email@example.com or www.harmonics.ie