During the Christmas and New Year holiday period, there would be many retailers offering discounts, and on the surface it makes sense to buy something when it is discounted. However, there are many times when I go into the shop with the intention to buy something and end up buying something else as well because it is discounted. Discounts create a sense of urgency and exploit FOMO.
This is purely anecdotal, but based on my observation, those who tend to buy products on discount also tend to end up buying a lot, which makes sense because sales are used as a marketing tool to attract customers and boost sales.
Avoiding FOMO using deliberate ignorance
At the train station, there is a display that provides the times when certain trains would come. This display details which train comes at what time, when the next train comes, and which platform to go to. I have seen many people look at this display, notice that their train is coming in a few minutes, and then proceed to run to the platform because they feel stressed that they may miss their train. Even if they miss their train, the next one will likely come in ten minutes, so is it even that harmful if they miss the train? Clearly FOMO is impacting them and creating a sense of stress and anxiety.
After realising this phenomenon, my technique now when I go to the train station is to never look at the display. I’d rather not know when the next train is coming. I’ll go to the train and catch whichever train comes next. If I end up at the train station and miss a train that came a few minutes beforehand, because I never knew that train came, I don’t feel any worse off, and even if I am ten minutes late, it doesn’t really matter.
The same anti-FOMO concept can be applied to discounts and sales. Rather than shop around for the best discounts and sales, it is better to just ignore everything and only buy when you really need to buy.
Buy discount and stock up vs buy only when necessary
I have a friend who is obsessive about sales and discounts. He would collect petrol coupons and bulk buy goods when they are discounted. He has two children and needs to cook for them. Once when I went over to his house, he showed me his stash of vegetable oil. When vegetable oil was on sale, he bought an enormous amount and stockpiled it in the garage.
From experience, I know that when you have a huge amount of a certain product at home, you tend to use it up more. For example, if you see food on sale and buy it and leave it at home, the food is likely to be eaten very quickly. So stocking up on more will just make you consume more. It is like keeping cash in your wallet. The cash will just end up being spent because it is so easy to access. Money that is harder to access, e.g. because it is locked up in an illiquid asset such as your home or your retirement account, is harder to spend. The same concept applies to consumer goods. If you need to get dressed and go to the grocery store in order to buy something, it adds layers of friction, which means you are less likely to consume it. Food in the supermarket is less likely to be consumed than food in your refrigerator.
As such, rather than hunt for discounts on food, bulk buy them, and then leave them at home where you overeat them, I believe it is better to leave as little food as possible at home and just consume what you have. Once you run out, then you buy a small amount and do a quick search to see where it is cheapest.
In other words, frugality is about reducing quantity by suppressing desire rather than bulk buying in order to get a discount only to encourage overconsumption.
Avoiding commitment
When you think about it, buying something on discount is a form of commitment. You are committed to consuming that product. For example, if you purchase ten bottles of vegetable oil, you have committed yourself to consuming all that vegetable oil before the expiry date. However, over time you may get sick of the vegetable oil. The problem with commitment is that you cannot reduce consumption once your desire wanes. If you purchased vegetable oil as you need it, if you suddenly get sick of vegetable oil, you can just stop buying it.
I Live Off Dividends 