The Rachel Cruze Show - How Luxury Brands Are Getting You to Spend More

Starting point is 00:00:01 Well, hey, you guys, so listen, having nice things is not a bad thing. I always want you to remember that because on this channel, we always talk about ways to save and dupes and all of this. Listen, having nice stuff, it is not bad. But the problem is when you have nice stuff and then your nice stuff has you in return is not a great place to be. So if you do think that luxury items need to be a part of your life, then you'll have to realize that that can be a recipe for overspending. And listen, luxury brands understand this, and they can take advantage of this way of thinking. So today, I want to explain how luxury brands are getting you to spend more than you need and share some practical ways for you to avoid some of their marketing schemes.

Starting point is 00:00:50 But before we begin, be sure to subscribe and share this episode with a friend who might enjoy it. All right, here's the thing, you guys, with money, you have to remember, money is a tool. It is not good, it is not bad. But depending on our motivation on how we handle money could be good or bad, right? We can be great at saving, which is a good thing. But then sometimes you can be a hoarder and that's a bad thing, right? You can have the motivation to spend and enjoy life, which is great, but then you can overspend and maybe try to create a life that is, you know, beyond what you have through that money,

Starting point is 00:01:24 and that's not a good thing. So again, the money doesn't care, but it's how we use the tool, which matters really the most. So we have to really understand how to use this well. So one way that I see money being used in a negative way is when people decide to use it as a measure of success. And it's like a measuring stick of like, where am I? And if I make more money, I'm more successful. So I'm somehow going to be better or happier. And that's just not true. And it's very normal to feel like you need to live at this level of expectation of maybe some of the wealth that's around you and like this level of living and thinking, okay, I have to raise my lifestyle to meet what everyone else is doing.

Starting point is 00:02:04 But keep in mind that a lot of people use debts when it comes to their life and their lifestyle. Even people that look really wealthy, there's a good chance that they're going into debt for some of the stuff that you're seeing. And listen, companies know about this. Like, they know that this is how people shop. They know that people are tempted to overspend, so they use that to their advantage. And a classic example of this is in store credit cards, right? If you apply for the credit card, you get 10 person off your purchase.

Starting point is 00:02:33 And while that sounds tempting like you're saving some money, they know that when you spend with a store credit card, you're going to spend more with them, which means you're going to go into debt and pay interest on that item. You're going to end up paying more for it and you're going to spend more money. So they know that. So of course they're going to take advantage of that. And other marketing tactics that you might be familiar with, you know, if you spend X amount, you'll get free shipping, bogo deals are also a way to buy more.

Starting point is 00:03:00 Even buy now, pay later. This is like the type of debt that I feel like is more accepted in our world today because it doesn't really feel like debt because it's just like four different payments and it's no big deal. But you spend more when you use elements of debt, including buy now, pay later. But now, with luxury brands, they have gotten even sneakier with their sales tactics. So they have what's called price value bias, which really pretext. that customers appreciate items more or value them as more high quality if the price goes up,

Starting point is 00:03:32 even if the quality of the item is subpar. So this allows luxury brands to make more money because they can market their products as exclusive by charging more while spending less and less to make their product in the warehouse. So they can keep raising the price and it feels like, oh my gosh, you're getting so much value and kind of this exclusive thing because it is so expensive and they end up making more money. And the reason that this works for a lot of people is because the life of luxury has become more of an expectation in life. And it's wild when you think about the algorithm and you think about social media, the amount of content that is in front of you, and after you see something over and over and over and over and over and over and over again,

Starting point is 00:04:13 you start to believe that it's normal. Like that's how people live. And it's crazy too because they will throw content at you from like influencers that are like living the high life. to celebrities, all of it. Like, the idea of even you think about a private jet would have been like, that's like for people like, oh my gosh, like that's so out of reach. Like you may see that on a movie, right, 20 years ago. And now it feels like you scroll and you're like,

Starting point is 00:04:37 oh, you can see anyone on a private jet. You just got to search private jet. And like, there's all these random people in the world on them. And you're like, what? We're like, that is, that's crazy, right? So even that idea of just feeling like, oh, yeah, well, everyone lives, you know, maybe not that lifestyle, but just this idea of not.

Starting point is 00:04:53 nice designer stuff or great vacations. And when that becomes the norm of what you see when you scroll, you start to really believe that is normal. Because what is not being fed in your algorithm as you watch those videos and see those posts more and more are just normal people living normal lives and not that kind of life. And it's like, but that's not showing up. So again, understanding what social media can do and how it really gets in our brains and what we believe is the norm, is not reality. All right, here are three tricks to be aware of. Next time you might be tempted to buy a designer handbag.

Starting point is 00:05:28 Number one is seeing luxury products everywhere in pop culture. So this is not new, but the internet has made it more prevalent. And we've always seen celebrity ads, but with luxury products are more like casual when they're more normal videos, like on TikTok, for instance. It can feel like they're accessible to everyone. and like, oh, yeah, this is normal. So remember, don't fall for that. Number two, marketing products is just a quick upgrade where it's like, yeah, you could just have one luxury product, like hours right here, buy this. And, you know, you can still wear, you know, your old sneakers, jeans, like no big deal. Like the outfit doesn't really matter.

Starting point is 00:06:05 But if you have the one elements of designer, it feels elevated. And so it feels really achievable. And people are like, oh my gosh, well, I can't afford a $50,000 down payment on a house. But I'll get a $3,000 bag just so make me feel better, right? So watch out for that. And then number three is fake exclusivity. So major brands like Nike and Gucci have admitted to destroying their own products and marking them as sold out to create this feeling of scarcity. And so you have to watch out if you feel like, oh my gosh, this is like the new thing. I have to get it.

Starting point is 00:06:35 Now if there's this level of urgency, that means always pump the brakes when it comes to your spending. So here's the takeaway. Just live within your means. I think it's really important to know the reality of where you are financially so you can make decisions. So if you are in debt and you're stressed about money, then make changes to get out of debt and find progress on that ends. If you have been doing this, maybe you've been doing the baby steps for 10 years and you're like, yeah, we're about to pay off our house and we're good and I do want to splurge here and I have some cash, then that's great. It's not bad, but knowing the reality and the motivation of your money is what is so important, especially if we're talking about more,

Starting point is 00:07:16 like high dollar luxury brands and lifestyles. Again, it's not that it's bad. It's just we have to know the reality of ourselves and our money. And if you need help with this, the every dollar budgeting app will always keep you grounded in that reality. So I love every dollar. It's an app and you're able to look at your income for the month. You plan out exactly where your money's going. So you have a plan. So you're able to give and save and spend where you want and you're able to live within your means, which is so crucial in today's world. And it's never a great idea. Remember to compare yourselves to people in the internet, even people that feel like, yeah, that mom that's in Salt Lake City, and she's like living this great life. Don't compare your life to her. Don't compare your life

Starting point is 00:07:56 to celebrities. Like all this stuff, right? So whether it seems like everyday people or not, the comparison game will quickly feel like quicksand, honestly, because you just get sucked in and it is hard to get out. So just put the blinders on and do what's best for you and your family. So always remember, it is never a great idea to compare yourself to people on the internet, but sometimes it is helpful to know where you stand financially compared to the average American. So be sure to check out my episode all about that next or click the link in the description. And remember you guys to take control of your money and create a life you love.

The Rachel Cruze Show - How Luxury Brands Are Getting You to Spend More

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