Money comes with emotional baggage.
- Money is related to many of our formative experiences.
- It’s easy to get carried away with spending for special occasions or the holidays.
- Beware of overspending at big sales and also on vacations.
For many people, myself included, money management is tied to emotions. If you think about it, it makes a lot of sense. Money is part of many of our formative experiences. Think back to when you were a kid getting cash for your birthday and feeling rich (I’ve never felt richer than when I turned 10 and had $40 cash in hand – I was able to spend it on cassette tapes at the mall) . Or remember watching your parents pay the bills (and for many people, seeing them stress about how to find the money for those bills).
Once you’re an adult, you’re responsible for your own money in most cases, and this can be a scary situation. There are so many opportunities to make bad decisions with your money, like buying a house for the wrong reasons. Or you could end up in debt and have to find a way to get out of it. Life is full of potential money traps. Here are some everyday occurrences where you could find yourself spending too much money.
1. You feel emotional
Have you ever heard the phrase “retail therapy”? This is when you go shopping for the express purpose of feeling better. One survey found that 62% of shoppers had bought something to cheer themselves up, according to WebMD. This can be a very dangerous game, especially if you have a weakness for online shopping. It used to be that you had to physically leave your house to indulge that shopping itch, but now all you need is a device with internet access and a credit card. By the way, you don’t have to feel bad to do this; sometimes you can be happy and feel like buying yourself a gift to celebrate.
2. You have to buy a gift
Speaking of happy occasions, it’s all too easy to overspend if you’re shopping for a gift, especially if it’s for someone you love and want to make happy. I once spent a few hundred dollars that I couldn’t afford (I was a grad student at the time) to buy my dad an archery set for Father’s Day. It may have been 15 years ago, but I still remember it, as well as the hit to my checking account. (He loved it, by the way.) Remember that for the people you love, it’s often your presence that makes them happiest, rather than your gifts.
It’s all too easy to forget all caution (as well as your shopping list) when you’re in the middle of a big sale. For events like Black Friday or Amazon Prime Day, it can be helpful to make a plan ahead of time, even if part of the plan is to set a certain amount of money (for example, $50-$100) that you’re allowed to spend without further ado. justification.
4. You are celebrating the holidays
Many people have just gone through the holiday spending cycle, and I hope it hasn’t been a season of overspending for you. The holidays are another time when we forget that the important thing is to spend time with the people we love, instead of going into debt to buy them the perfect gift.
5. You are on vacation
Sometimes the holidays don’t feel like real life. You’re away from home, seeing beautiful scenery, and eating at fun new restaurants, so you might end up feeling like the money you spend doesn’t matter. And after all, spending on experiences makes us happier than simply buying items, according to 2020 research from the UT Austin McCombs School of Business. Be wary of overspending on vacation, because just like memories, credit card debt can stick around for a long, long time.
How can you better manage your spending?
If you’re having trouble with your spending habits, I understand. It’s never as simple as “stop spending so much money”, right? Fortunately, there are a few things you can do to keep a tighter grip on your money:
- Make a budget: It’s not sexy, but having a clear view of your income vs. your expenses can really help. If you’re not a fan of spreadsheets, try a budgeting app.
- Talk to a professional: I think it’s great to talk about money with everyone in your life, but I’ve become a big believer, especially in talking to a money professional like a financial planner. They have no vested interest in your finances and can make recommendations for your spending, saving, and future planning.
- Increase your income: In a very real sense, you can only scale back so much. If you’re living paycheck to paycheck even after taking steps to spend less on the fun stuff, consider increasing your income if you can. This could be in the form of a raise at work, an extra hustle, or even landing a new full-time job (or career).
Above all, don’t stop paying attention and don’t give up. Every day is an opportunity to get better with money and figure out how to defeat your overspending triggers.
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