Avoid triggers of bad spending habits

This was originally published on Monday, August 8 ,2016 in the Pacific Daily News.  Click here to subscribe to the PDN.

Emotional spending is becoming a trend in today’s society.

Money is very personal and you could become emotionally tied to it. Shopping can cause the body to create endorphins, which give the shopper a rush. When the “high” is over many feel guilt or realize that their purchases have put them in financial jeopardy.

  • Spending to feel good. When stressed, some people turn to comfort food or alcohol to ease the edge. Emotional spenders use shopping as a way to feel good. Shopping gives them a diversion from what is really bothering them. While shopping, they do not have to face the issues at hand. Eventually they will have to face it and unfortunately it usually is too late. The damage has been done.
  • Better life. Numerous people want to improve their life especially if they grew up without much. It is hard as a child to be deprived of certain things that you see other kids get so easily. As an adult you may be trying to overcompensate what you were missing as a child. Purchasing top name brand shoes and clothes can make you feel that you are no longer that underprivileged child. Perhaps it is the reason you buy new cars because your parents could never afford one.
  • Power. When we think of power, we often think of wealth. It is not hard to see why we associate power with money. Being able to spend when we want equates to us having money. It feels good when people respond to your purchase.
  • Upkeep of your standards. When we were younger, we had less to worry about and less responsibilities. As we grow older, more people start depending on us. Our lifestyles change. Maybe we have more mouths to feed or we need more health care. As we get older, we need to start thinking about retirement. Our spending should reflect a more modest approach. Just because you used to spend that way and you were all right then, does not mean that level of spending should continue. This may cause you to spend more money than you actually have. Accept that life changes and so does your budget.
  • I saved money. Just because something is on sale does not mean you need to have it now. When you start focusing on the savings, you can lose sight of the spending. Of course, we all want to save, but at what expense? If you were intentionally going out to purchase that item, the sale is a bonus. But if you are just purchasing it because it is on sale at that time, you have done your budget a disservice. Sure, you may have saved some money on the purchase, but if you didn’t need it then you are actually spending money, not saving it.
  • Idle time. One of the biggest spending traps is boredom. When people feel that there isn’t anything to do, they create something.  Shopping is an activity that keeps you busy. It is pleasurable because it can be done at a leisurely pace; it is usually in a comfortable store and things around you are neat and tidy and pleasing to the eye. Many people say they just want to walk around and window shop. But with so much temptation, it is hard to ignore.
  • Self-worth. Spending money to raise your self-esteem can be a slippery slope. Yes, it feels good to get a manicure or get your hair done. On occasion you should treat yourself. But if you feel that it’s the only way to achieve that boost, you may want to reconsider how your money is spent.

We are potentially guilty of emotional spending. Retailers are aware of it and take advantage of our weaknesses. Know your triggers and temptations. The next time you go shopping, put safeguards in place to keep yourself from reaching for your wallet.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at moneymattersguam@yahoo.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.

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