Consumer IQ

5 Money Lies That Make Us Overspend

Remember that time you went to the mall to pick up a much-needed new winter coat and somehow ended up with $300 worth of new clothes? Oh, and then there’s that time you decided to make a “quick” trip to Home Depot to grab some paint and ended up buying enough supplies to redo your bathroom twice over. If you’re like most of us, you told yourself a “money lie,” a not-quite-accurate statement justify those unneeded purchases, that spurred the unnecessary spending.

Here, we reveal the top “money lies” that make you spend too much and how to fight back.

“If I Don’t Buy It Now, I Might Miss Out”

You’re at the mall and you see a “one-day sale” sign in front of your favorite store. Once inside, you find a stylish pair of jeans with that coveted 30% off tag on them and think, “What a great deal! I don’t want to miss out on that!” Despite the fact that you already have two perfectly good pairs of jeans, you find yourself inching towards the register with your soon-to-be new jeans in hand. What happened here?

“Limited-time offers and one-day deals create sense of urgency among consumers who feel that if they don’t buy now, they could miss out on the value later down the road,” says consumer adviser, Andrea Woroch. In effect: People don’t want to feel like a good opportunity passed them by, so they’re compelled to buy items they think might not be around much longer — even when they don’t need them.

The fix: To help combat this mentality, “Realize that merchandise is on sale almost all the time,” says financial consultant, Mike Friedmann. “If you don’t need it right then, don’t buy it.”

“I Need It”

“A big lie that consumers often tell themselves is that they ‘need’ the particular item in question,” says Dr. James Roberts, author of “Shiny Objects: Why We Spend Money We Don’t Have in Search of Happiness We Can’t Buy.” He also says, “Pretty much everything we buy is a discretionary purchase, not something we need.”

The fix: Roberts advises, “To stop that ‘I need it’ rationalization, realize that you really only need food, shelter and clothing (and we’re not talking about lobster, McMansions or Jimmy Choos, here). Beyond that, it’s all about what you can truly afford to buy.” You can stay on budget with mint.com’s free money-tracking services.

“I Can Always Return It”

You’re on the fence about whether you’ll really wear that sparkly cocktail dress or those new sneakers, but you rationalize buying them anyway by saying, “Well, I can always return them later.” If you’ve told yourself this money lie, you aren’t alone. “This is a common thought process,” says Kathleen Burns Kingsbury, author of “Creating Wealth From The Inside Out Workbook.” She says, “We think that being able to return the item purchased is a way to purchase without any consequence.”

Here’s the problem with that mentality: “We often forget to return the item or don’t return it within the narrow window of time,” says Friedmann. “It leaves us saddled with unwanted purchases. Plus, a lot of stores have strict return policies, where you can only return something for store credit or within a short period after buying it.”

The fix: Of course, you should aim to only buy items that you really need, but if you do end up buying something that you’re on the fence about, “Set a reminder on your smartphone for when you need to return the item by,” recommends Friedmann. “This way, you’re less likely to be saddled with a purchase you don’t love,” he says.

“I Should Buy It Since It’s For Charity”

A number of companies now say they give part of their proceeds to charity. While this is a noble move on the part of the company, it also leads consumers to spend more because they tell themselves, “It’s the right thing to do because I’m supporting a good cause.”

“There is only a thin line between a decision to spend or not to spend,” says Scott Saunders, CEO and founder of Payoff.com. “Although this is very subtle and usually deep in the subconscious, the thought that our purchase would fund a charitable cause could be the tipping point.”

The fix: “To stop getting lured in by this money lie, it’s first important to recognize what’s going on here,” says Friedmann. “Secondly, you should realize that often you’re better off just giving directly to the charity, than buying a product that only gives part of the proceeds to charity,” he says.

“It’s Worth It For the Freebies”

“One of the biggest money lies we tell ourselves is that it’s worth buying something because of the free gift we’ll earn by buying it,” says Saunders.  Another big “freebie” that causes us to overspend is free shipping. “Higher minimums required to qualify for free shipping causes consumers to buy more to receive the pleasure of complimentary delivery,” says Woroch.

The fix: “Most likely, you don’t need that freebie and wouldn’t have paid money for it, so don’t let that sway your decision,” experts say. “Think about what you would have normally paid for each item on its own,” says Friedmann. “If the total price is more than what you’d have paid for each on its own, it’s not a good deal. Then, ask if you would have even bought that freebie if it wasn’t part of the bundle,” he says. “If not, don’t put too much weight on the addition of that item to the package.”

In the case of being swayed by free shipping, use the same mentality. Ask yourself, “Is spending more on items really going to be financially worth it to get free shipping?” Woroch says, “You should also see if you can get free shipping elsewhere by checking out coupons from FreeShipping.org, shopping on Free Shipping Day (December 16th) or shopping with a retailer that offers free shipping on all orders.” Finally, check out MintLife’s article on whether or not free shipping is really “free.”

“5 Money Lies That Make Us Overspend” was written by Cheap Chic.