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Spending money that you know you shouldnât spend is a universal experience. It stresses not only you budget, but also you psyche, and it can lead to feelings of guilt, shame and disappointment.
But uncovering your individual motivations for spending money, including the money beliefs you grew up with, can be the first step toward breaking the cycle. Your approach to spending, and what you regularly buy, can also be related to your current financial circumstances and whether youâre feeling strappedâin ways that might surprise you.
Hereâs how to explore your own spending behaviors, and how to use that knowledge to regain power over your finances.
When youâve made a purchase you didnât need and it left you feeling distressed, itâs possible you responded to one of these common spending triggers.
When you look frequently at othersâ Facebook and Instagram profiles, seeing their new cars, vacations or shopping trips can pressure you into spending, too. Thereâs a reason that marketers on social media are called âinfluencers.â
You may also be targeted by ads for items that brands believe youâll like, based on your demographics and browsing history.
Online shopping makes it even easier to spend as an emotional reaction to social media scrolling, said Meghaan Lurtz, president of the Financial Therapy Association.
âCouple ease of spending and feeling not great about something you saw on Facebook, and it is a recipe for disaster,â said Lurtz, who is also a senior research associate at financial planning website Kitces.com.
Your best bet is to ignore the ads and to understand that you canât know othersâ financial details â friendsâ lavish vacations could be funded by credit cards they canât pay off.
When you pay for an item with cash, the effect can feel immediate. Less cash in your wallet means less money to pay for other expenses throughout the day, but a credit card erases that awareness.
If you regularly overspend on credit cards, put yourself on a cash-only spending plan for a week, or even a day if longer feels too overwhelming. You might notice yourself spending more mindfully.
Many of us grew up with money beliefs passed down from parents or caregivers. If one or both of your parents had an impulsive mindset or did not track spending carefully, itâs understandable youâd do so, too.
Or, maybe your parents were extra frugal. If you didnât want your life to feel as restrictive, perhaps youâre on the other end of the spending spectrum.
Take an honest inventory of the beliefs passed down to you, and acknowledge that some of your negative spending behavior may not be your fault.
Shopping when weâre feeling down is a common way to make ourselves feel better, temporarily. But the boost from emotional spending is short-lived, and it could make you feel disappointed in yourself in the end.
Next time youâre tempted to buy something on a hard day, call a friend or spend time outside to improve your mood instead.
You may justify spending if itâs for holidays or othersâ birthdays, since it seems more selfless than spending on yourself. But it will have the same negative effect on your budget.
Set a spending limit for these occasions, and aim to make do-it-yourself gifts if money is tight.
It might sound counterintuitive, but if youâre already in debt or recently overspent on another purchase, you might be more likely to spend more. Or perhaps youâre stressed over having little money and you feel youâre owed a nice item, such as a new TV or pair of boots.
Your socioeconomic status can affect the type of spending you do. According to a study published in 2018 in the journal Psychological Science, consumers with high incomes and education levels felt happier spending money on experiences, such as concerts and travel, than on material things. But the study found that spending money on material things was more likely to make those with lower incomes and education levels happy.
Once youâre aware of what encourages you to spend, you can start addressing these triggers one by one. If you need help, finding a therapist â particularly one who has experience discussing financial issues â is a good start.
Psychology Today offers a database of therapists. Or, you can use your health insurance companyâs online portal to search for one who takes your insurance.
When you have goals to visualize and work toward, youâll be more likely to identify if the ways youâre currently spending are in line with them.
Picture yourself five or 10 years in the future. Are you in a home you own? Are you traveling the world? Write down your goal, and maybe open a savings account specifically for this purpose.
Every time youâre about to spend on something youâre unsure you need, consider whether that would take you further from your goal.
Use a budgeting app or spreadsheet to track all your purchases for at least a month. Ideally, the app you choose will categorize your purchases so you can see what youâre spending most on: meals out, personal care or clothes, for instance. Just seeing your spending might be enough to encourage you to cut back or reallocate money to certain segments of your budget.
You can also turn tracking into a spending journal, Lurtz suggested, and note how you were feeling when you bought each item. That can help you spot patterns.
âDid you shop while you felt sad, bored, angry, happy?â she said. âThere is nothing wrong with shopping or treating oneself, but if we do it to mask another issue, it could turn into overspending.â
Taking too restrictive an approach to spending could backfire. Instead, set aside a percentage of your after-tax income â say, 10% â to non-essentials each month. Donât create parameters on what you can spend on, but donât go beyond that amount, either. It might help you get more creative in how you spend on entertainment, and you wonât feel that youâre unable to enjoy life.
If you have a tendency to make impulse buys, make it a rule to wait 24 hours before purchasing anything either in person or online. Ask if a store will hold the item for you, or leave the item in your online shopping cart for a day.
You might find you donât need it as much as you thought you did, or that you forget about it altogether.
Perhaps a friend, partner, coworker or family member is also looking to reevaluate their spending. If so, reach out and suggest you keep in touch weekly or monthly about how youâre doing.
Meet to set up a budget or spending tracker together, share your goals and cheer each other on.
There will be times you overspend â or youâre tempted to â even after youâve made progress. Thatâs normal. Instead of getting angry with yourself and potentially spending more thinking youâve already messed up, be kind to yourself. Treating the issue with lightness will keep you from falling into a deeper spending spiral.
When you overspend, you face tangible consequences, such as accrued interest on credit cards, potentially missed bills and the resulting negative impact on your credit. Payment history accounts for the biggest share of your credit score, so not having enough money to pay credit card or student loan bills could harm your score and your ability to borrow money in the future.
Plus, knowing youâre overspending can create a growing feeling of dread if youâre unsure of how to get back on track. You might be tempted to avoid looking at your credit card or checking account balances at all.
To avoid these consequences and control your spending, get to the heart of why you spend, and do your best to not feel so ashamed that youâre afraid to ask for help.
Many consumers struggle with overspending, so know that you have company. But the reasons why you spend will be specific to you, and itâs worthwhile to understand them. That will give you the insight to make changes that can help you feel more in control of your financial life.
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