Have you ever seen an ad on Facebook or Instagram for something you didn’t really need, but you ended up buying it anyway? If the answer is yes, it’s probably because you saw three magic words: “limited time only.”
We are mysteriously drawn to open up our wallets whenever we feel like something we want is in short supply. And businesses aren’t afraid to take full advantage of our buying impulses by telling us that there’s “only one left” or including a countdown timer for when a sale ends on their website. We’ve even seen this play out on a national scale — the pandemic toilet paper shortage and the more recent craze over Taylor Swift concert tickets are just a couple examples of how millions of us spend more when we’re afraid of missing out.
These impulse purchases don’t just hurt your wallet for the next week or month. Over time, they can prevent you from reaching the big financial goals that really matter — buying a car, planning a wedding, or starting a college fund for your kids. That’s why it’s so vital for us to understand where our shopping habits come from and how we can gain control over them. On this HerMoney Podcast episode, we’re joined by marketing and psychology expert Dr. Mindy Weinstein. She is the founder and CEO of the digital marketing firm Market MindShift, which has trained thousands of professionals on the fundamentals of marketing. She’s also a marketing instructor at Grand Canyon University and the University of Denver, and the author of “The Power of Scarcity: Leveraging Urgency and Demand to Influence Customer Decisions.”
Mindy walks us through the concept of scarcity, and how our brains react at a primal level when we know that a resource is limited (even if the “resource” is a dress or a pair of shoes). She talks about the four different types of scarcity, how businesses tap into them through marketing, and why those marketing tactics are more powerful when they’re used on younger generations.
Then we dig into FOMO, or fear of missing out — what it is, why we’re so susceptible to it, and how we can train ourselves to take a pause before buying into the latest trends. Mindy explains the role that social media plays in making us feel FOMO, and how we can teach our kids to resist. She also tells us why she thinks FOMO and scarcity marketing in general will become more prevalent in the future — which makes it even more important for us to learn how to overcome them today.
Fortunately for us, scarcity isn’t just something that retailers use to make a bigger profit. Mindy shares how we can all use these same business strategies to improve our own careers, our personal relationships, and even our dating lives.
In Mailbag, one listener asks Jean and Kathryn to weigh in on her long-term care insurance policy. Another listener wants to know how she can transition from having one full-time job to multiple part-time jobs — and what financial implications she should be aware of. And in Thrive, how to stop paying the pink tax.
Check out more of Mindy’s work on her websites, Persuasion in Business and Market MindShift. You can also find her on LinkedIn and Twitter.
This podcast is proudly supported by Edelman Financial Engines. Let our modern wealth management advice raise your financial potential. Get the full story at EdelmanFinancialEngines.com. Sponsored by Edelman Financial Engines – Modern wealth planning. All advisory services offered through Financial Engines Advisors L.L.C. (FEA), a federally registered investment advisor. Results are not guaranteed. AM1969416