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Spending too much

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Spending too much

Oct 31, 2019Tyrone Wiseman

To buy or not to buy?

Spending money: instant high vs long-term low

Have you ever hidden a purchase? Or justified buying something you don’t really need? Spending money lifts our spirits and makes us feel good. But there’s a flip side. Once the initial euphoria wears off, a shopping spree can leave feelings of guilt, stress and regret.

It is common for people to engage in ‘retail therapy’ (Cryder et al., 2008). When they feel upset or unhappy, buying something causes a behavioural shift towards an immediate improvement in their mood. But, while a one-off ‘cheer-me-up’ impulse buy might be OK, it can become a real problem for people who are spending money they can’t afford. And, with individualised, targeted marketing and the easy availability of internet shopping, it’s almost impossible to ignore the lure of the immediate shopping ‘high’.

Wandering through a shopping centre allows people to visualise themselves in a ‘better’ life, one where they’re dressed in nice clothes and surrounded by beautiful things. Unfortunately, we tend to splurge when we are feeling down. And buying designer clothes or expensive homewares serves to make these visualisations a reality.

The retail industry is designed to encourage people to part with their money. Shopping centres and supermarkets strategically channel shoppers exactly where they want you to go, constantly encouraging you to spend more than you had planned. That’s why the milk and bread are never at the front of the supermarket!

Unnecessary spending can take its toll by impacting an individual or an entire family unit. But it’s not just shopping that causes problems.

Gambling is another form of spending that can have a huge effect on a person’s financial situation. Although everyone knows that ‘the house always wins’, according to a BBC survey of gamblers ‘Even when you’re losing, your body is still producing adrenalin and endorphins.’ This feel-good ‘high’ makes people continue to gamble, even though they are ultimately losing money. This is exacerbated when a losing streak changes to a win – and even a small win causes the gambler to feel good, regardless of the overall financial loss they have experienced.

Whether it’s impulse buying, or spending time at the pokies, self-destructive financial activities can impact your mental state, financial situation, work life and personal relationships. While there may be underlying psychological issues such as depression, anxiety or trauma behind these behaviours, people often struggle with their feelings of guilt and regret and hide both their spending habits and their worries.

Depending on your circumstances, there are many different ways to address the issues around unnecessary spending. Professional psychological assistance is certainly helpful if this is causing major problems in your life. But, if you’re caught with a burning desire to buy something unexpected, there are some simple measures you can take at that moment to reset your thinking and prevent spending money. 

As suggested by Dr April Benson in Why 'Money Disorders' May Be Ruining Your Budget, there are six questions you can ask yourself before you make your next purchase:

• Why am I here?

• How do I feel?

• Do I need this?

• What if I wait?

• How will I pay for it?

• Where will I put it?

Running through these questions and assessing your answers will enable you to pause, breathe, and think clearly about the consequences of your decision.

If you are experiencing financial difficulty or struggling with unnecessary spending, please get in touch – we’re always happy to have a chat!