Imagine yourself in your favorite store. There are people bustling about, constant chatter, babies wailing, and the bright lights tackle your corneas into thinking it’s a beautiful morning. You take a deep breath in and your lungs fill with the smell of department store perfume, the smell of consumerism!
Suddenly, something catches your eye. It’s a 43” 4K Ultra HD TV priced at $500, marked down from $1000! It’s a flirtatious deal. Unfortunately, you only have a $300 budget for a new TV. Well, you could just put it on your credit card. After all, you deserve the TV. A little overspending never hurt anyone, right? WRONG!
Unless you’re a spartan with your spending habits, you’ve probably overspent at some point. It’s hard not to, those deals are just so attractive with their low prices and tantalizing displays. Overspending is simply spending more money on something than you originally intended. Let’s take a quick look why we overspend and some strategies to avoid it.
1) Social Comparisons and Self Worth
One reason you may talk yourself into overspending is because of social media. That’s right, the haunting powers of Facebook are at it again! I’m sure you have more than a few friends in your newsfeed who post pictures of their new TVs, cars, clothes, houses, or Rolexes. It’s natural to start thinking, “Hey! I work as hard as Ernie, where the hell is my BMW?! I deserve one!”
People naturally compare themselves to their peers, and when people believe they’re lagging they want to fix it. Additionally, people derive a bit of self-worth from having the objects. Having the latest gadget or new luxury car signals wealth. Remind yourself that you don’t know why, or how, your friends can afford things. Maybe they’re shopaholics, or perhaps they saved up for months for the purchase. Decide to evaluate your worth on other things like your health, relationships, or wicked skills at ping-pong.
2) The “Sale”
In the example with the 4K TV the customer is lured into the trap due to the markdown. It feels like such a deal to get something for cheaper than the original price. It’s such an effective tool for retailers that consumers internalize the transaction as having saved “X “amount of dollars. Customers fail to realize they didn’t save money, they spent it.
The next time you’re shopping, and the price appears enticing because of the red slash through the price, pause for a moment. Don’t let the sultry price whisk you away too easily. Ask yourself, “Do I really need this?” If the answer is “Yes” check your budget to see if it’s in your price range.
3) Poor Moods
Everyone has bad days. These occasions force you to feel like you have no control. You might get a flat tire, get yelled at by your spouse, and stain your favorite T-shirt. It just seems like the universe is out to get you. Just like that you’re feeling down, you want to crawl into a hole and be forgotten.
In such moments people look to find control. This need is often met by making a purchase. Buying something gives people the feeling of control. That rush of endorphins gets you buzzing! Unfortunately, your wallet may not feel as ecstatic. A study performed by the University of Michigan found participants who viewed a video clip of a bullying incident felt happier after making a purchase than their counterparts who did not. It’s clearly in our psychology.
The best way to avoid this type of spending is to find a constructive outlet for unhappiness. Venting to a friend, exercising, journaling, and screaming into a pillow are all cheaper options than buying some frivolous trinket when you’re upset.
Visualize yourself in the department store once more. You’ve had a long, stressful day. You slipped and fell in mud, that jerk Ernie posted another picture on Facebook posing with his BMW, and your spouse told you you’re not funny. Across the aisle the crisp 4K Ultra HD display ensnares your eyes. You’re more in love with the TV than you are with your spouse (for the moment). The price has a thick red slash through the price, it’s only $500!
Quickly, you take control of this passionate retail moment! You shut your eyes, take a deep breath, open your eyes, and walk over to the aisle with all the pillows. You snatch the first pillow you see and start screaming into it, profanities, and all. Security escorts you out of the building. Some customers appear to be filming the incident on their smartphones. The day isn’t so bad though, you didn’t break your budget.