Lifestyle

Dangerous Shopping: Why We Overspend and How to Stop

I would say that most of my purchases are impulse buys. You go out with the intention of buying a pair of shorts, and come home with a cashmere sweater that was on sale, a new lamp and a Snuggie. The problem isn’t you, it’s the crazy human brain that gets affected by different spending triggers and persuades us to make poor purchase decisions. So let’s take a look at some of the reasons why we overspend and how to stop the madness.

Costs associated to upgrades

So you save and budget and decide that you can afford a nicer, more expensive car. The thing that some people don’t consider are the extra costs that come with that car – like maybe more premium gas, higher insurance rates, and more expensive maintenance than your old trusty ’95 Toyota. The same goes for expensive clothes – you bought a nice designer jacket, but now you need to pay for dry cleaning. You bought an iPhone, now you have to get all the apps and fancy accessories. What about your upcoming European vacation? Now you need a camera, a hat, a sundress…

The fix: When you’re planning to make an expensive purchase, make sure to factor in ALL of the associated costs of having these new things. For your vacation costs – borrow things from friends, and remember that no one else knows you’ve worn those sundresses the last three years.

Getting a raise

Too many people make the mistake of thinking that a raise means that they should increase their standard of living – maybe buying a new car or bigger apartment. The mentality is that you are now in a higher earning bracket, and your lifestyle should reflect that. The more and more you adjust your life to more luxury and spending, the harder it is to scale back if and when you have to.

The fix: The key is to maintain your same spending habits and put that money into debt relief, an emergency fund, or an investment like your retirement fund. Put a little bit of money aside to buy yourself something nice as a reward for all of your hard work, but be careful not to get caught up. Just because you got a raise doesn’t mean that your job is 100% secure.

Being stressed or depressed

impulse spending

When you’re having a crappy day or feeling down, your brain’s defense mechanisms begin looking for ways to make you feel better. This is why you can end up indulging in that giant piece of cake, and why you also feel tempted to do some feel-good shopping. Many psychologists agree that impulse spending can be directly linked to a low self-esteem, so working on making yourself happier could save a bunch of money.

The fix: There are several fixes to this one:

  • If you find yourself out shopping, head home and pick up the phone and chat with a friend instead – preferably a funny one who always lifts your mood.
  • Get together for coffee – or even better, hit the gym for a boost of endorphins.
  • If you find yourself online shopping, leave the items in your cart and see if you still really want them tomorrow. Studies show that after 48 hours, the surge of dopamine (the reward chemical in your brain that makes you want to purchase) wears off.
  • Another trick: wrap a post it note with the question “Do I really need this” around your credit card. Works.
  • Better yet, leave credit cards at home! This way you’re forced to have to think about the purchase.

Hanging out with rich (or wanna-be rich) friends

When people who are very concerned with status surround you, it’s a lot easier to get caught up with having the latest trends or buying designer labels to keep up with them. Realize that these people very likely don’t have money to spend, and are going into debt for things that won’t bring long-term happiness. According to the Federal Reserve Board study, 43% of American families spend more than they earn. Scary. These people will also be the ones to tell you how much you deserve it, how you just HAVE to have it, and the always annoying YOLO.

The fix: It’s fine to be friends with people like this, but resist the urge to ever go shopping with them. It’s so easy to get caught up in the excitement of buying nice things or being in high-end stores. I guarantee you will have post-purchase remorse and end up crying since your new Jimmy Choo’s now mean you’re incapable of paying rent (and your landlord doesn’t care that you now own a pair of Jimmy Choo’s).

Sales Sales Sales

I fall victim to this one too. The Barney’s warehouse sale gets me every time. It’s once a year, and I’ve found myself literally pushing women out of the way to buy things I never ended up wearing once. We think we’re doing ourselves this big favor by saving money with discounts, but end up buying things we don’t need or even really like.

The fix: Ask yourself  “would I still purchase this if it WASN’T on sale?” If you would still want it full price, then go ahead and buy it. If you simply don’t have the money to shop, don’t even put yourself in the position to be tempted. If there’s something in particular you need, go to the sale and look for that item only – easier said than done, but stay away from the other sections!

Those little alerts on your phone

If you subscribe to services like Guilt, Living Social, or everyone’s new favorite, PoshMark – you’re going to get little alerts telling you about the amazing sales going on now. These will no doubt tempt you to buy things like jewelry or facials that you just don’t need right now.

The fix: Unsubscribe! Turn off alerts! Keep those sites only for when you’re searching for something you need. For example, if I want a massage I’ll check out the sites, but I don’t need to be emailed or alerted every day.

Your relationship status

If you are going through a breakup, you may turn to shopping to make you feel in control and empowered again. It also renews your feelings of self-worth, and you may be tempted to purchase things like makeup and beauty products that will get you ready for your new single status.

singles spend more money

The fix: Find other ways to feel empowered – it sounds cheesy but I am a huge fan of self-help books. The Mastery of Love has gotten me through more than one break up. Spend time with your friends and realize that saving your money to go on an amazing trip that will clear your mind and make you strong will serve you a lot better than a tanning bed and some eyelash extensions.

Keep all of these things in mind the next time you’re out shopping. Remember that the short term happiness that buying something new brings can only truly be enjoyed if it doesn’t come with the stress of worrying how you’re going to pay your bills.

11 Comments

  1. David Grutman says:

    It might be the hardest thing in the world not to upgrade on items when getting a raise or coming into some extra $$. Especially when u justify it in your head as you rewarding yourself. The real reward is over powering that and saving that extra money. Thank u TFM for making me realize that

  2. I don’t have an Iphone or Ipad, I stopped hanging out with friends that spend money just about every night on dinner and drinks. Sorry can’t wing that. I will say that its true about shopping and self-esteem are linked, I tend to shop more (clothing and makeup) when I am feeling a little blue about myself. Trying to curb those feelings tho.

    • Friends that go out to eat all the time can definitely get expensive! I’m glad you’re aware of your triggers – that’s going to help you out a lot.

  3. It’s epidemic in our country, this consumerism that plagues us that gives us this status because we’re holding something or wearing something. It’s an old cliche’, but it’s really who you are inside that matters, but our society doesn’t seem to value that anymore. Now, it’s all about what can you do for me.

  4. The fix for your “SALE SALE SALE” section is my personal favourite. I create a list of things I really need before the sale opens. Once the sale opens, I strictly buy things on my list only, I dont look around and thats how I stay away from impulse buying.

    And when a salary raise comes, I put 50% of the raise in savings and enjoy the other 50%.

    By the way, thank you very much for such a great blog. All of us really need this common sense about money, which is uncommon these days.

  5. I love this!!! Especially since I now know that I’m not the only one who finds the phrase YOLO very obnoxious.

    The first thing I did when I became single was shop a LOT. It wasn’t until a month later that I found out the jerk was still hurting me but now indirectly through my credit card bills.

    The gym tip works so well after you’ve been hurt by that you considered close to you. Just knowing that you’re getting stronger keeps you from those breakup relapses where you just want to breakdown and cry.

    P.S. You’re gorgeous both physically and mentally. Can’t believe you’re Canadian too. I think you’re my new idol. Keep up the great writing!

    • Vanessa you’re so sweet! Thank you so much for sharing your experience and for making me feel like I’m idol potential today haha – So happy you found the site and you’re enjoying it. Means so much to me :)

  6. I am one of those people who if I am depressed or just feeling down I would have gone “out” to cheer myself up. In the past “Out” has usually meant to store where I would have ended up buying some. It took me a long while to come to terms with the behavior and when I have a day like this (today being one of those days) I have made myself stay away from stores. This includes stores like Amazon.com.

    • Good point! It’s easy to stay home and mope and go online … and end up spending money shopping online. Being aware of your patterns is a great start (and a great way to save money).

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