Some research has also looked into how touch impacts our money decisions. In 2003, in the US, Illinois’ state attorney general’s office issued a statement around the Christmas holidays warning consumers to be careful about holding an object as it might encourage them to buy it. It might have been one of the odder public service announcements, but research indicates that touching an object increases feelings of ownership — and we don’t like to lose things that we own, Rick said.

As soon as you feel something you become a “quasi-owner” of that item, he said. That’s when loss aversion kicks in — a theory that people can’t bear to lose money or goods — and it becomes difficult to let go, regardless of whether you need or can afford the item.

This partly explains why we simply must have that car we just took for a test drive or why losing a house to another bidder can be so devastating. Often, the moment we sit behind the wheel or walk through a place, we want it.

But, we don’t immediately hand over our credit card in exchange for car keys because there’s a lot more work that goes into purchasing a vehicle or a house than a video game or a pair of trousers. In the case of the former, there’s a built-in time lag between when we want something and when we buy, Howell said. “It takes a lot of time and effort to think about a house and to pull the trigger,” he said.

However, we still make bad decisions during bidding wars. It’s surprisingly easy to drop an additional $5,000 on a house, even if it’s over the price limit you had set. The worry? It’s scarcity fear again. If we don’t get this house, another one might not come along.

“There are a lot physiological variables that go into a bidding war,” Howell said, including the fact that it is exhilarating and emotional to bid and win.

Ultimately, our bad split-second money decisions come down to one thing: we don’t take the time to think. If that bidding war was done over days or weeks, rather than minutes or hours, it’s unlikely you’d keep hiking up the price of that house, Howell said.

Resist the urge

Can you counteract your natural tendencies? With a bit of discipline, it’s possible. Howell suggests waiting 24 hours before making any would-be impulse purchases, big or small. Of course, that means you need to recognise when you’re being tempted. If you still want the item the next day, then buy it if you can afford it. But most likely you’ll have forgotten about it or the intense must-have feelings will have dissipated.

Another trick: start monitoring your spending and pay with cash. If you are able to see just how much you’re parting with, you are more likely to end up only buying the things you really want.

Purposely over-examining purchases and ruling out certain categories of items altogether has worked for Kumok. By running through her list of questions, she delays her purchasing decision and thinks hard about whether she needs an item. She buys almost no books these days and instead checks books out of the library, buying only tomes she really wants to own forever.

Of course, the urge to spend hasn’t disappeared. Just a few weeks ago Kumok walked into a store and saw a box of chocolates with a yellow tag on it. She thought the tag meant it was a sale and the familiar “buy now” feeling came over her. When Kumok got closer, she saw that it wasn’t a sale tag after all. Would she have bought the chocolates if they had been on sale? Probably, she said.

“Those little tags really do crazy things to people’s minds,” Kumok said.

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