A purchasing decision is not one that should be taken lightly especially when you put into consideration the implications it has over your financial way of life. Income and expense are two of the hardest things to manage and balance. A tip on one side, regardless if you suddenly find more cash on your hand than you expected or bigger bills than you anticipated – they have dire financial consequences.
Having more cash than bills would always be a welcome development but being exposed to unexpected funds can lead to unexpected purchases as well. If you suddenly find out that your wallet has a few dollars to spare, there are people whose first thought is what to buy rather than where to invest and save the money.
The balancing act you do when you are budgeting your funds rely mostly on two things – the income that comes in and the money that goes out. Between the two, it is easier to manage and control the expenses rather than looking for a way to increase income. With this, your purchasing decision and being a smart spender on various things is put on the spotlight.
One of the major factors people need to consider nowadays is the power of social media and the role that is has with your Buying decisions. Statista.com shares that Facebook alone has a 41% penetration rate and that in the overall scheme of things, social media penetration on the overall population is at 59 percent. This goes to show how pervasive social media is and the role it can play in the purchases of consumers.
Social media and your purchasing decision
When you are looking at your decision making with your purchases, social media has some advantages and disadvantages. Here are some worth looking into.
Cons of social media
- You go where the crowd goes. Forbes.com shares in a recent article that states people are still easily influenced by people around them. This is where herd mentality comes into play because there is tendency that people buy what most people are picking up. And they see these when people are using social media to announce their purchases. Whether it is as small as a piece of shirt to as expensive as buying a car. The more people buy or prefer a certain brand, the more the others are inclined to do the same. This is the reason why most brands are investing a lot of money to build up their social media profile and community.
- Friends can influence you. This starts with what your family and friends are sharing because they can influence you in a big way. When you check your social media feed and notice that they are all buying the same brand, there is this desire to belong and pick up the same product. If total strangers have a pull on what you buy, imagine the influence of people close to you.
- Eye advertising. Brands and companies have taken notice on the power and clout of social media in your purchasing decision that they are investing advertising money to follow you and deliver you content to sell their products. The algorithms are so complex with social media that there are times you would find an ad in your feed about a product in Tokyo just after you talked about flying out that particular place in a week’s time. You might have visited pages looking for a bike and then the succeeding ads that will pop up on your social media feed are about bikes.
Pros of social media
- Easier to check a product.Nowadays, you need to shop smart to be able to save money and realize your long term financial goals and social media can be a big help in your purchasing decisions. It can help you check out a product before you even head on out the store or cart the product for check out. It is important to know as much as you can about an item based on the specifications and more importantly, what other people are saying about it. There are some who might have bought the same product and you can see if they were happy or displeased with the item.
- Reach out to brands faster. When you have a specific questions about a product, social media has made it a lot easier to connect with the brand directly. Most, if not all maintain a social media account to be closer to their customers. In the past, you might have to look for a company email address and hope against hope that they get it and respond. Now, you can use twitter and other social networking sites to reach out and talk to them directly.
What to take note when making a purchase
There are more to social media than just shopping. Apart from trying to ensure that online shopping is secure, there are a few more questions you can run through your mind to help you make the decisions whether to buy or not. Here are some of them.
- Do you really need it? Making a purchasing decision should never be taken lightly and one of the questions you should ask yourself is if you really need to buy an item. Seems simple enough but a lot of consumers are unable to answer this truthfully. Some have even developed this attitude of being able to convince themselves that they need to buy an item even if it falls into their “want” category. If it is a need for it like a camera because of your income-generating hobby then go ahead. But if you are buying an item just because you saw it in social media then you would soon find your finances in trouble.
- Do you need it now? If you are able to arrive at a conclusion that what you are going to make is a valid expense, the next question you can ask yourself is if you need it now. This is especially helpful when you are running a tight budget plan and might not have planned for the purchase. If it is not an emergency then try to plot out the expense at a future date so you can save up for it.
- How are you paying for it? If the purchase is necessary and has to be made, you need to have a clear plan on where you will get the money from. Do you have reserve funds to speak of that can shoulder the expense or will you rely on your credit card? It would be nice if you have some backup money but using your card might be a little tricky. The last thing you need is to be part of the statistics where Nerdwallet.com shares that the country has about $733 billion credit card debt. Just be sure to have a repayment plan in place to avoid paying more for what the item actually costs.
A purchasing decision is not something to be taken lightly because it can affect your financial strength as well as your long term financial goals. Social media can help you guard against unnecessary expenses but you need to have an idea how to use technology to your advantage rather than falling prey to marketing and advertising pressure to buy things you do not need.