Consumer Corner: What our overspending triggers are — and how to avoid them
Easier Be To Habits Stay Avoid Our Are Expenditure To Exposure Trying As And We Triggers’ Adopt Make Of Everyday Our That We Life Than To Can Entirely Of To Actively Can Tied These Avoid, In Rather Practice It Control ‘spending Most Our Minimise Challenging It To Triggers
The famous ‘Black Friday’ event is just around the corner and with that comes the panic of bagging a bargain before it’s too late.
Black Friday is just one of the many ways shops and marketing gurus encourage people to part with their money.
There are of course many ways consumers are targeted and this takes the form of deals, ads, special offers, and spending events.
These days too, with the evolution of social media, it is becoming harder and harder to avoid ‘spending triggers’.
A spending trigger is any emotional, situational or environmental factor that can lead you to spend impulsively or outside of your budget.
Spending triggers are all around us and they can be ignited by any number of things from how we feel, to how we want others to feel about us, or by sheer lack of willpower.
It is important to manage these triggers however and be aware of what causes unnecessary spending.
Spending too much on things we don’t need could be a slippery slope and could result is some serious long-term finance headaches.
According to financial advisor, Leah McMahon of Castle Capital Financial, there are three common spending triggers.
Emotional Emphasis">the Class="contextmenu First
“Emotional spending or ‘retail therapy’ is a common spending trigger that happens based on our emotions. It can occur when emotions are low and someone is looking to boost how they are feeling by getting instant satisfaction in a new purchase.”
Emotional spending can also occur in response to something exciting happening and be disguised as a way of rewarding ourselves.
This Feel To Is Spend Pressure When Certain We Keep Under Social Emphasis">the With Second Class="contextmenu Up Trigger And
“There can be a sense of ‘Fomo’ or ‘fear of missing out’ which leads people to spend impulsively to be involved even when it is beyond their budget.”
Time Based Class="contextmenu Spending Third Emphasis">the Trigger Then
The We Start Weeks, Of Three An Over Increase Sales See Shops Two The Christmas Next As Variations Spending Season Up In And Advertising For To Will Few Other Creeps Discounts,
“Big discount events can be triggering for us because it does create the sense of ‘missing out’ on the sale and at times can have the opposite effect where we spend too much because we’ve gone over our budget.”
Once aware of spending triggers means it should be easier to manage them or even avoid them.
“In order to manage spending triggers, you need to be aware of them. Understanding allows you to make a conscious effort to resist the temptation of over spending.”
It can be challenging to avoid ‘ them entirely as most of are tied to our everyday life.
Rather than trying to avoid, we can adopt habits that we actively practice to minimise our exposure and make it easier to stay in control of our expenditure.
Ms McMahon suggests starting by setting up a budget but making a big effort to stick to it.
“Sounds simple but having an understanding of what comes into the household and household running costs can be powerful. It also reinforces the responsibility of running a household and that you have financial commitments to meet.”
“If you find yourself impulsively spending or thinking ‘where is my money going?’ then budget is your new best friend.”
Another way to manage spending triggers is to be accountable and track your spending by keeping a diary of your discretionary expenditure.
Include a note with each purchase on how you were feeling or the reason behind the purchase. This can help to identify a pattern and highlight a potential ‘spending trigger’.
Also using the 72-hour-rule can help with temptation.
“When you feel the temptation to buy, wait 72 hours. A lot of impulsive expenditure can be cut down by having a time period on which you can reflect and think about the value of an item or service.”
Ms McMahon says that a ‘fun fund’ can also help with impulse spending.
This takes the form of allocating a portion of your income to the ‘Fun Fund’ and this introduces a percentage of your income that can be spent guilt free.
Ms McMahon generally recommends a breakdown of 50% net income is used for your household expenditure, 20% is for your personal savings, and 30% is for discretionary income.
At the end of the day too, nobody is perfect and we have aim to follow habits that will help cut back on impulse buying but it is important to remember that mistakes happen.
“It can be hard to find someone who is not guilty of over spending or impulse purchasing at one point in our lives. They key thing is how you respond and move forward. Go back to the basics, set out your budget and track your expenditure. The more you monitor your expenditure the more conscious you will become with your spending.”