If you’ve studied marketing and advertising, you’ve very familiar with the analysis of potential and current customers.
When analyzing our target market, we ask:
– Who are they?
– What products are they most likely to buy?
– What messages are they most likely to respond to?
– What motivates their purchases?
– What causes them not to purchase?
Using this same framework, you can analyze your own spending habits and find what motivates you, what messages work on you, and how you might be able to change your spending habits to save money.
Two ways to get started:
Analyze your Amazon suggestions/purchase history
Amazon (or any other major online retailer) spends significant resources to understand your spending habits and predict what you are most likely to buy next. Why not use this to your advantage?
For example, a quick skim of Amazon’s suggestions for me indicates that I’m most likely to buy beauty products and kitchen gadgets from them. This makes sense, as I’m very particular about wanting a specific beauty/kitchen product and unwilling to go to 10 stores to find it. At the same time, beauty products can be more expensive on Amazon than in retail. I could save a significant amount of money by going to a brand’s website and finding the products locally in a store. Or, I could save money by being less particular with my purchases.
Analyze your debit/credit card statements
Take look at your debit and credit card statements from a third-party perspective, as if you were analyzing someone in a focus group for your product or service.
What are you spending your money on and where? What’s the repetition of your spending habits? Where are the patterns? What percent of your money is going toward various purchases or categories of purchases?
For example, after I gifted him The Total Money Makeover book by Dave Ramsey, a friend of mine analyzed his own budget from a third-party perspective and what he found was shocking: “The family” (aka him and his wife) were spending $1,400 per month on eating out!
So dedicate some time this week or weekend to taking a look at yourself as a target market and see where you spend your money and how you might change that for the better.