Want to take control of your finances once and for all? One of the easiest ways to do that, along with tracking your spending, is by understanding your motivation to spend.
Many of us have financial problems due to mindless spending. If you’re not actively keeping track of where your money is going, expenses add up rather quickly. I know I’ve had my fair share of, “I spent how much on what?!”
Have you found yourself living paycheck to paycheck, or have you wondered where the heck your last $1,000 just went? Then you need to get to the root of your spending problems.
The good news is, you can get started with one simple question: Why?
I’ll illustrate this with a personal example, and then we’ll cover a few ways you can understand your own motivation to spend.
I Can’t Believe I Spent $1,000 on Cosmetics
My biggest spending weakness to date has been beauty products. Thankfully, I kicked this bad spending habit nearly two years ago, and it hasn’t come back. But it did a lot of damage before it was gone.
It started off harmlessly (of course) with my first full-time office job. Along with buying a professional wardrobe, I wanted to make sure my makeup looked the part.
That led to me watching endless amounts of YouTube tutorials, which introduced me to some of the beauty gurus out there. While I have nothing personal against these girls, they’re bad influences on your budget.
They come out with review after review, routine after routine, and it’s easy to justify buying everything they do because hey, it worked for them – it could work for you, too.
I got caught in that cycle for a few years. I wandered over to the beauty aisles in Target and Walmart constantly, and even went to the dreaded mall a few times for higher-end products.
All in all, I probably spent at least $1,000 on these items over the course of two years. A few items I still have cost $50 each! Believe me, I’m not proud of it.
Why Was I Motivated to Make These Purchases?
The main reason was insecurity. I wanted to fit in at my job, and I wanted to look the best I possibly could. Makeup allows me to feel more confident about myself.
It wasn’t until I paused to ask myself “Why?” that I also realized that subconsciously, I was mimicking the behavior of the girls I was watching in hopes of becoming more like them. They were flawless, seemed like they had it all, and were making a living off of their passion for cosmetics.
I had a wake up call when I got clear on my priorities. Paying off my student loans is much more important to me. I was spending hundreds of dollars on makeup while my loans accrued even more in interest. The tradeoff wasn’t worth it; my motivation to become debt free won out.
What’s Your “Why” for Spending?
I usually encourage people to find their “why” for goals, but finding your “why” for spending is just as important. It’s the key question that will get you to the root of your spending issues.
It might seem silly – it’s just one word, after all. But that one word happens to hold a lot of power.
Ultimately, you want your “why” for spending to align with your values. Why am I okay with spending money on travel, education and new experiences (within reason)? Because these are all things I value. Sure, I value looking nice, but not to the detriment of paying off my student loans.
Look back at your recent expenses. Ask yourself why you made each and every transaction. Be honest, and take a moment to think about it. If you can’t evaluate every spending decision you’ve made, signing up for a free account with an online financial tool like Personal Capital can help you by tracking your expenses for you; then, all you have to do is log into your account to see what you’ve spent and you can get on to the real task, which is determining whether or not you should have bought it in the first place.
Common Reasons for Spending Beyond Our Means
Not everyone is more motivated to save than to spend. Spending can be a lot easier, especially when it means getting what we want (or what we think we want) sooner.
If figuring out why you’re spending is proving to be difficult, then see if these common reasons for spending beyond your means resonate with you.
Shopping because you’re bored: This is something I’ve run into in the past. For whatever reason, going to the mall seemed like a good idea. It got me out of the house, it was a place to walk around, and it could be fun to look at what stores had in stock. Nowadays, I’m fairly certain going to the park is a much better solution.
Convenience: I have been guilty of spending on convenience many times over, mostly when it comes to food. When you’re hungry, you’re hungry, and waiting to make a meal is the last thing you want to do. Preparation is key!
Confusing wants and needs: Do you think you need a new phone? If your old one works just fine, it’s not a need. Technically, anything you’ve survived without this far in life is a want. It can wait until you can afford to buy it.
Thinking of credit as free money: While we’re on the subject, having a credit card doesn’t mean you can afford something. It isn’t free money. If you’re viewing the available balance on your credit card as a license to spend, you’re costing yourself hundreds of dollars in interest down the road.
Fitting in: This usually boils down to “keeping up with the Joneses,” but that can mean a number of different things. There were times I felt I didn’t fit in at work because I brought lunch to work with me, and everyone else ordered out. There were times I felt weird wearing the same outfit multiple times when people seemed to wear something different every day of the month. Peer pressure can come in a number of different forms, which is why it’s important to keep the focus on yourself whenever possible.
Filling a void: It’s safe to say a lot of us spend on things we think will bring us happiness. Unfortunately, a lot of us are also focused on instant gratification – we want to be happy now! That translates into short-term thinking, which results in buying things for a temporary rush. We’re looking to fill a void with a purchase, when the real solution is something that money probably can’t buy.
Entitlement: Last but not least, many of us spend on things we think we deserve. Whether it’s having a bad day at work and needing something to look forward to, or thinking it’s time to upgrade your car because you got a promotion at work, think long and hard about what you truly deserve. The answer shouldn’t be something that gets you in debt or leads to financial stress.
Don’t Just Avoid Temptation…
Understand it. You can cut yourself off from temptation all you want, but rarely does going cold turkey work unless you understand the whole picture.
You can’t just quiet the voice in the back of your head that’s going to bother you; you need to silence it. That’s best achieved by identifying your motivation to spend and replacing it with motivation to save or pay off debt.
I was on and off with buying makeup until I realized exactly why I was spending so much money on it. Once it hit me, not only was the temptation to buy gone, but the desire to watch YouTube tutorials and reviews vanished as well. It was almost as if a weight was lifted from my shoulders.
Next time you want to buy something that’s not a necessity, ask yourself why. Go through the reasons for spending listed above and figure out what you can do to establish better spending habits. Before you know it, you’ll be spending in a way that honors your values.
What are one or two things you can’t believe you spent so much money on? Were they in line with your values? Can you relate to any of the common reasons to spend beyond your means?