The common shopping habit that could end up costing you thousands down the line
As many prepare to get their finances in order for the New Year new research has revealed the one habit that will reveal if you're good or bad with money.
When shopping the decision to opt for quality or quantity reveals a lot about the state of your finances, according to a new study conducted by researchers at the University of Colorado Boulder.
If you tend to go for cheaper products and buy more of those items, you have an increased likeliness of spending more money in the moment and racking up more debt in the long-term.
'Buying more [things] makes it harder to track spending,' Rodrigo Dias, assistant marketing professor and co-author of the study, told Money.com.
'This can lead to unintentional overspending, which adds up over time.'
Dias said the data collected in the study shows this one simple shopping habit can reveal a lot about someone's financial position.
This is largely because consumers tend to be very consistent with their shopping habits, he explained.
For example, if you buy high quality shoes but few pairs, this tends to be the way you shop in other ways such as with food and furniture.
Researchers believe one shopping habit will reveal if you're good or bad with money
The data, collected from 24,000 shoppers, also found that shoppers who favor quantity actually spent more overall, accrued more debt and struggled paying off that debt.
In a shopping simulation the quantity shoppers selected $89 worth of goods compared to $79 for quality shoppers.
26 percent of quantity-focused shoppers saw an increase in credit card debt during a one year period, according to the study.
Whereas only 13 percent of quality-focused shoppers saw an increase in debt in the same period.
The debt is also likely to remain longer for quantity-focused shoppers because frequent purchases means more of their income is being consumed by spending rather than paying off existing debt.
There are several factors that lie behind our shopping habits, Dias explained.
These can include being priced-out by more expensive but higher quality items, but also other cultural, psychological and economic factors.
Quantity buyers, for example, often struggle with compulsive buying or low self-control, Dias argued.
26 percent of quantity-focused shoppers saw an increase in credit card debt during a one year period
The study concluded that quantity shoppers tended to have to lower overall financial wellness and that this in turn can push people in to quantity shopping.
'This finding is particularly troubling,' he says. 'It points to the possibility of a cycle of financial vulnerability, where financial struggles lead to purchasing habits that exacerbate those struggles, creating a vicious feedback loop.'
