Finance & Money
Finance & Money
Be 20% Happier & Richer: Kick Your Instant Gratification Habit
Our cashless, one-click spending habits are running up debt and draining our joy
First the bad news: Research shows that our one-click ways of shopping, dining and entertaining ourselves can make us a little blind to how much we’re paying for all this convenience.
The Birth of Instant Gratification
And it’s a lot: a 2018 Harris Poll reveals that Americans are willing to spend nearly 30% more if it means saving time. True, that preference was seen most often among millennials. But I’d argue there’s a kind of modern, mid-life woman who acts more like a digital native than data scientists would guess. We’re busy. We’re addicted to our devices. We have disposable income (or think we do). Sure, we might skip young-skewing offerings like Snapchat and gaming apps, but when it comes to digital spending, we’re all in.
And by “we” I mean me, as it turns out.
My list of online services and subscriptions include Netflix, Amazon Prime, Hulu, BritBox (oops, meant to cancel that one after my free week), Audible (ditto), Spotify, The New York Times, Squarespace, LinkedIn Premium, Dollar Shave Club and, until it tanked last year, Movie Pass. They add up to about $100 per month or $1,200 per year. There’s also my discretionary — and also unexamined by me until right this very minute — spending on Uber (to avoid taking the subway), Seamless (to avoid making dinner), Groupon (to avoid, um, overpaying for things) and Amazon Prime (to avoid ever shopping in a store again).
And I’m flirting with Rent the Runway, the garment-renting service that would set me back $159 per month, should I commit to it after my discounted first month.
The Danger of Invisible Spending
If you’re wondering how all this digital spending has remained so invisible to me, here it is in a nutshell: because it is invisible to me.
Yes, the recurring subscription fees show up as credit card charges every month. But I think of Netflix, for instance, as costing me just $14.99 — not $180 a year. More insidiously, my well-worn transaction paths were purpose-built to be “frictionless,” to use the term coined by the monsters at tech companies. I know this because I work in digital marketing and we partner with programmers who work hard to make the digital “path to purchase” as obstruction-free as possible, with the “buy now” button practically clicking itself.
That said, in my personal life, I actually appreciate it when apps hustle me toward a fast transaction.
A nearly everyday example: In the time it takes me to muse, fleetingly, about just how much I don’t feel like getting on the subway, the Uber app finds me on its map and shows me how many drivers are a minute or two away. It also knows where I want to go when I select “office” as my destination, relaying the address — along with the fastest way to get there — to the driver. No physical cash or card is required; nor is a tip.
“Confirm UberX?” the app asks.
Alexa, the Enabler
Shopping via smart speakers offers an even more expedient path to purchase.
I have an Alexa that’s hooked up to my Amazon Prime account so that it can send me the stuff I simply ask for out loud. I’m like a storybook princess who needs only to voice my desires (“Nespresso pods!”) and they’re ordered up and on their way. No button-clicking is required and I don’t even see the price.
By contrast, think back 10 years ago. Remember when taxis didn’t accept credit cards? Remember having to get your hands on an actual 20-dollar bill before you got in the cab? Remember watching the meter tick up so fast you’d ask the driver to drop you at the next corner — close enough! — before another dollar was added to the fare? Remember having to calculate the tip in your head?
You know what we’d call all that these days?
Slow Service = Saving Money
Likewise, remember the days when you’d stand in line at the CVS, the handle of your shopping basket cutting into the flesh of your arm, contemplating your purchases? Remember getting buyer’s remorse before you bought a pricey impulse item, surreptitiously shoving it into the candy rack?
The line was friction too. As were the physical dressing rooms in brick-and-mortar clothing stores, quiet spaces that left you alone with your thoughts: “Do you really want this garment?” your reflection asked you. “Can you afford it?”
Friction is being replaced by evermore enticing and convenient digital services — with new ones announced weekly, or so it seems.
On the day I’m writing this, Apple debuted Apple News+, a subscription service that bundles content from some 200 publications, for a cost of $9.99 per month. Apple continues to tease Apple TV+, a streaming entertainment platform designed to rival Netflix’s original movies and shows, launching this fall. The monthly price to consumers has yet to be announced, but we do know Apple has spent $1 billion on original programming and there’s news of a series starring Reese Witherspoon, Jennifer Aniston, and Steve Carell, from the producer of “House of Cards”, about the making of a morning news show. That’s worth $15 a month alone, right?
Last week, Instagram started offering Checkout on Instagram, partnering with a beta-roster of 23 retailers. As of this writing, you can swipe to purchase from Prada, Zara, and Outdoor Voices, to name just a few, with a credit card you attach to your account.
Sample Boxes: An Invisible Money Drain
Finally, monthly boxes of sample products continue to proliferate, offering members a convenient way to try out the best stuff on the market. The box model kicked off in 2010 with Birchbox, a curation of beauty products, currently charging $13 per month. There are now boxes for knitters, crafting and sex toys, as well as a service called Battlbox, with products for survivalists. And cats. There are boxes for dogs and cats.
Money guru Suze Orman has long sounded warning bells about the financial impacts of saving time over money. “We need to stop wasting our money on convenience,” she says with her characteristic firmness. “It adds up big time.”
OK, Suze, we’ll use our calculators to remind us that a monthly charge of 15 bucks equates to $180 annually, which, if invested to yield a 5% gain, would net us about $190. However, because we’ve agreed that we’re modern, mid-life woman, we’re keeping Netflix — but will consider these alternative, and less bleak, ways to rethink our digital spending.
5 Tips for Kicking the Instant Gratification Habit
I’ve done this and so should you. Why? Because nothing sparks less joy than credit card debt. Start by making a list of your recurring monthly expenses, which is sure to reveal your own personal BritBox — i.e., the subscription you forgot to cancel. Try to eliminate the ones you use least knowing that ….
2. Breaking Up is Hard to Do (But Do it Anyway)
ClassPass is especially clingy, compelling would-be quitters to engage with a chatbot before they’re served the “close my account” button. The bot throws in free points along with a lower monthly fee, not previously offered. If you’re a person who loves a deal, you’ll also likely be … a person who still has ClassPass membership (like me). Similarly, Angela at LinkedIn Premium emailed me immediately after I canceled my premium account, offering me a free month. If you think you can game it and actually “quit” your way into free services, go for it. But I suspect that the house always win.
3. Consider Using PayPal For All Subscription Services
Here’s why: PayPal lets you set up automatic payments and also cancel those payments, all in the app. You don’t have to try to do it directly with the service. It also lets you sort types of charges (subscriptions, for instance) in a monthly activity report, so you can keep an eye on your totals. Your banking app might have this function, too (mine doesn’t).
4. Don’t Shop While Sad on Social Channels
Or when you’re feeling deprived. Or when you’re vulnerable to imagery depicting other people’s perfect lives. We’ve all read reports that link feelings of inadequacy and low self-esteem to social media use. Now imagine putting a “shop now” button next to all that stuff that’s making you feel like your life is lacking. Dangerous. Avoid.
5. Use Digital Shopping Carts to Buy Time (But Not Necessarily Stuff) Is the mere act of putting a dress in a digital shopping cart enough to give you a little hit of dopamine? Or “hearting” a bunch of products as a way of saving them? Do that, then exit the site or app to give yourself time to ponder the purchase. This is especially true on Amazon Prime, the originator of the “one-click” transaction.
Prime throws free two-day shipping into the bargain, playing to our love of both a deal and nearly instant gratification. But there is, quite literally, a cost: Amazon Prime users ring up more than double the dollar amount spent by non-member Amazon users — a whopping $1,400 per year versus $600 per year, according to research conducted last year by Consumer Intelligence Research Partners. So while Prime promises to save you money and time, the bottom line confirms my suspicion: when the house in question is Amazon, it always wins.