Consumer IQ

Top 3 Psychological Spending Triggers and How to Avoid Them

Top 3 Psychological Spending Triggers and How to Avoid Them :: Mint.com/blog

If you’re reading this article, you’re probably like many of us:

We pay attention to where our money goes, try to limit unnecessary spending, but still find ourselves splurging more often than we’d like.

That’s because psychological spending triggers are everywhere, beckoning us to forgo our budgets and just buy what we want.

But don’t give up on spending discipline, just yet. Most of these common triggers can be avoided or overcome with some simple techniques.

“Reward” Purchases

So, you’ve been pretty good lately. You’ve been clipping coupons, stopped going out to eat, and started biking to work instead of driving.

You’re definitely spending less, and your bank account is starting to look healthier.

Suddenly, though, that new dress or piece of technology is beckoning even more loudly than before.

“I’ve been good,” you think. “I deserve to reward myself, don’t I?”

Stop yourself right there.

The “I deserve a reward because I’ve been so good” is the same mantra that derails dieters and budgeters, alike.

If it were just a small reward, it might not be a problem.

But that new tablet costs $500 and that dress much more than you wanted to spend on clothing all month.

These “rewards” aren’t doing your finances any favors, and chances are that you won’t feel any better for purchasing them after the newness wears off.

In fact, you’ll probably feel worse for having broken your budget.

The solution: Just like an over-zealous dieter, budgeters who try to cut back on everything at once may find themselves feeling so deprived, they’ll overdo it in a moment of weakness.

The key is to approach budgeting slowly – especially if you’re new to it. Start by cutting those areas you feel most comfortable with first, then work on others as you build your willpower – and bank account.

In fact, psychologists remind us that seeing the fruits of your efforts is its own best reward, so keeping track of your account balances on Mint.com or on your savings account statements can help give you the psychological boost you’ll need to stay strong.

And if you really do need a rewards, keep it truly small. An easy way to do so is by reminding yourself how much work you’ve been putting into your budgeting.

Is it really worth blowing it all now? And if you splurge big now, what’s to say you won’t do it again next week?

Starting from scratch and giving up on your budgeting goals is a bigger bummer than letting that new piece of bling pass.

“Great Deal” Purchases

It’s such a great deal! No, I mean, it really is.

Look at it – a brand new thingamajig with all the upgrades for a full 50% less than the original price!

That’s gotta be the very definition of budgeting and smart spending, right?

The Solution: Actually, it’s not. That new thingamajig may, in fact, be 50% off, but that’s still money you hadn’t budgeted to part with.

Think of it this way: It’s not 50% cheaper – it’s just that many more dollars out of your budget. Look at your budget. If you use Mint, set spending alerts.

“Great deals” are only great deals when they’re on items you had budgeted for and intended to purchase, anyhow. Anything else is overspending.

Which takes us to our next trigger….

“Necessary” Purchases That Really Aren’t

You “need” a new smartphone with 4G service, because that’s the new standard.

You “need” to go out to a fancy dinner because so many people you know will be there.

Maybe you just really “need” a new pair of boots because your current ones are out of style now.

The problem is, none of these are really needs. They’re justifications for over-spending based on appearances or social pressure.

The solution: Listen, I’m human, too. We’ve all fallen victim to this spending trigger at one point or another because, well, all of us want to keep up and fit in.

The problem is that, as we all know, it’s never enough. Keeping up with the Joneses will keep you on a spending treadmill that’ll run you straight into the poorhouse.

Instead, the experts say, keep the focus on what matters to you.

I don’t buy $100 skinny jeans, because no matter how fashionable they currently are, I’m too short and curvy to pull that look off.

I don’t buy the latest technology, because although it makes me look tech-savvy and cool, I’m really not. I’d rather buy a book (yes, the paper kind) than an e-reader.

But maybe you really are the kind that prizes fancy new technology. The point is not to go without, but to buy only what you really need.

Do you really need voice-activated technology, or were you after something that actually costs less, instead?

What are the things you actually need to help you lead a happy life? Can you foresee this purchase giving you more than a short-term new goodie high?

Buying what makes sense for your life and your priorities is about your personal happiness.

Keeping up with appearances….Well, I’m not sure who that really helps. I doubt it’ll do much for your bank account, either.