Retail Ninja Mind Trick #6: Rationalization and Justification

We rationalize and justify our purchases and our money mistakes without realizing it. The bigger the mistake, the more we rationalize it.

Look, we humans make lots of mistakes. Big ones, dumb ones--and once in a while, really big AND really dumb ones.

And, frankly, if we didn't make some effort to explain away our biggest, dumbest mistakes, our fragile psyches would collapse in the face of our profoundest stupidities. Even the most iron-willed of us would curl up into little balls and never leave the house.

That's just no way to live.

Fortunately, our brains have figured out how to make us feel better by using an entire bag of psychological tricks to help us play down--or even hide--all the dumb things we do.

And that's why that Soloflex machine we bought in a burst of optimism and fifteen easy payments of $99! somehow ends up collecting dust in a hard-to-see corner in our basement. Hey, who wants a daily reminder of both our waste and our laziness?

And that's why we convincingly tell our neighbors how much we love having that pool in our backyard, despite the hundreds of hours and thousands of dollars we spend each year maintaining it. Do we vividly remember that we only used it twice last year? Nope, not if we can help it. Instead, we'll vividly remember that it was an "investment" to improve the value of our home.

Of course there's a more pernicious form of rationalization/justification, in which we blame the government, "the system," George Bush, Alan Greenspan, Goldman Sachs--essentially anybody but ourselves--in order to protect our egos. Because that second home we bought at the top of the real estate market couldn't really be our fault.

Now, let's be fair: rationalization and justification have their advantages too. For one thing, they help keep the suicide rate below 100%.

The problem is, they also prevent us from accepting and learning from our mistakes. It's a whole lot easier to rationalize something than it is is to deeply grasp that we've committed a soul-shattering waste of time and money. And thus we fail to protect ourselves from our next gigantic dumb mistake, because we cannot learn from mistakes we rationalize away.

Here's the bottom line. When it comes to buying stuff, rationalization and justification are incredibly useful to the companies selling to us. Hey, if we keep making the same expensive mistakes over and over again, it keeps plenty of companies flush with plenty of our hard-earned money.

A few hints on handling this particular bias. First of all, just be sure to be very, very careful with all of your big-ticket purchases. Always remember one of the ugliest truths of psychology: the bigger the mistake, the more skillfully we'll rationalize it.

Therefore, reframe how you think about big-ticket purchases. Consider them mistakes until proven otherwise. Defer all of your big-ticket purchases until you are really sure you need and want them. Take some time to really roll them over in your mind, and to examine the emotions running underneath. Are you "too" excited to buy? Are events moving along where you think you or your significant other are getting pushed along towards buying something that you're not quite sure about?

You are completely within your rights to say "no," or "not yet" to any big-ticket spending decision. It's your money--you have the right to take as much time as you need. We'll go deeper into this in our next post.

Next up: False Urgency

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oilandgarlic said...

Just want to say that I'm really enjoying this series. I've been a careless consumer most of my life but taking 1 business course (which included discussion about mark-ups and consumer behaviors etc..) really opened my eyes.

chacha1 said...

I am loving this series too. Will probably link this entry very soon, tying it to my fitness theme, but have to do some research first!

For now will just say I am currently "justifying" replacing my notorious 16-yr-old Accord. Have to go through the maintenance records and see if it has really cost me as much per year as I suspect, or if I am just tired of driving an old, rattly, kinda homely, not very fuel efficient car. :-)

Daniel said...

Thanks so much for the feedback, and I'm glad to hear you're both enjoying it.

It's funny, but I never know how readers will react to a series like this--one that's admittedly a bit far afield of CK's typical subject matter. Ironically, a few readers who read me via email just unsubscribed, choosing "content is no longer relevant" as their reason for unsubscribing.

You win some, you lose some. :)


Anonymous said...

@chacha1: Go for it on the new car! I loved my 10 year old civic, but it sure is nice to not be wondering what's going to break next or cost me more.

My dad did some kind of "dad math" a while back (it involved a slide rule), and assuming you pay cash for a new vehicle (he always does) the fix it vs replace it comes out to between 10-12 years old for an average car. If you include the hassle of dealing with a not functioning car. When the AC went in mine last summer, that was the final straw for me.

Dan, I'm enjoying this series too! We have a little one on the way, and they might be small, but they sure are economic stimulus packages!

chacha1 said...

Autumn, thanks for the encouragement. :-) I paid $6000 cash for this Accord about four years ago. Since then I have put about another $6000 into repairs and maintenance. That comes to $3000 a year to operate the vehicle, and for that amount of money I can have a new one!

Considering I drove my first Honda (a CRX) for 14 years, we're still driving our 1999 Accord bought new, and those are the only two "new" cars we've ever owned, I kind of think we're due.

But maybe I'm rationalizing! LOL