Do You Know Your Spending Triggers?

From Michele Cagan, CPA

If you often spend more money than you intend to or buy a lot of things you wish you hadn’t, it’s time to get to the bottom of those spending behaviors. Overspending tends to be tied to emotions, social situations, and chasing a “shopper’s high.” And while the instant gratification of new purchases feels good, it takes a serious toll on your financial future.
 
Figuring out what triggers you to overspend can help you take back control and kick this bad financial habit. You’ll feel relief when your credit card bills don't send you into a panic, and you won’t regret having a closet (or cabinet, or basement) full of things that you don’t really want.
 
Sort Out Emotional Overspending
Emotional overspending tends to fall into one of three categories: guilt, emptiness, or frustration. No matter which emotion drives you, that overspending puts your budget in jeopardy. Looking at the feelings that cause you to spend can help you figure out ways to pause your spending urge and make a conscious financial choice.
 
  • Guilt spending is common among parents who feel as if they don’t spend enough time with their children, spouses who do a lot of business travel and leave their partners behind to manage everything at home, and grown children who rarely call or visit their aging parents. These situations often lead to guilt spending, where you buy frequent or expensive gifts for the person you feel you’ve let down.
  • Emptiness spending kicks in when people feel like something is missing from their lives, and they turn to shopping to fill that hole. Retail therapy offers a temporary sense of happiness and control, and when that fades, the emptiness feels sharper than before.
  • Frustration spending is often born out of anger and boredom. People get bored and annoyed sitting in waiting rooms or waiting in lines and end up shopping on their phones just to pass the time. Spending can bring a feeling of control to a situation that you don’t have any control over.
 
If you can trace overspending back to any of these emotional triggers, your awareness is the first step toward breaking the negative habits. Look for other ways to deal with your emotions, like finding someone (a friend, a therapist) to talk with or replacing the spending habit with something more productive.
 
Get a Handle on Situational Spending
Sometimes you’ll find yourself in situations where it feels natural to spend money even if that spending puts you way over budget. This often involves being around other people who are spending money and expect you to do the same.
 
Common high-spending circumstances include things like:
 
  • Socializing at bars, restaurants, festivals, and other spending black holes
  • Going shopping with friends
  • Attending weddings, baby showers, and other parties where gifts are expected
  • Hanging out with people who frequently borrow money
 
If you can’t or don't want to avoid these situations, be conscious of what you’re spending (or lending) and how it will affect your budget, and take proactive steps to make sure you don’t overspend. For example, when you know you’ll be facing social pressure to spend, leave your credit and debit cards at home and stick with cash, or use tab-sharing apps like Venmo to help make sure you don't get stuck picking up the tab for everyone on margarita night.
Budgeting 101

From Getting Out of Debt and Tracking Expenses to Setting Financial Goals and Building Your Savings, Your Essential Guide to Budgeting

By Michele Cagan

“Cagan makes the case that a budget isn’t a buzz killer. It’s financial salvation.” —The Washington Post

Don’t break the bank—learn to create and stick to a budget with this comprehensive, easy-to-understand guide to saving money sensibly in this edition of the popular 101 series.

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