Did you spend money you didn’t intend to this past holiday season? If you are regularly falling victim to money rationalization (talking yourself into a purchase you don’t really need or can’t afford), you are doing yourself and your budget no favors.
Have you told yourself any of the following lies recently? If so, make it your new year’s resolution to stop right now.
- It’s on sale! There’s a very good reason why retailers put things on sale, offer two for one deals and give discounts. By offering something on sale, it gives the consumer a sense of urgency about purchasing the item. You know that the sale or discount will not last forever, so you want to snatch up the item before you lose out on the great deal. The thing is, it doesn’t matter how good a bargain the price is if you don’t need that item, because it’s still too expensive. If you are tempted by an item that’s on sale, put it down and walk away. If you still want it the next day (or even the next week), go ahead and buy it. The sale will still be in effect, and you will know that this is a good purchase, and not just an exercise in retail psychology.
- Buy now and save later. Later is a great time to do things you don’t want to do, whether that’s budgeting or dieting. It’s very easy to promise yourself that you’ll pay for your splurge by saving money in the future. If you are trying to rationalize a purchase by thinking about what you can give up next week or next month to pay for it, then you simply can’t afford the purchase. If you haven’t learned how to budget (or diet, etc), you’re not going to magically wake up knowing how to do this in the future. Telling yourself no now will be the first step in being the savvy budgeter you hope to be tomorrow.
- I need a reward. After a stressful period at work or at the end of a major project, it can be easy to want to reward yourself with something nice. But looking at a new pair of shoes or an expensive car and thinking “I deserve this!” is not the right way to go about being financially secure. Giving in to impulse buys because of stress will not help you achieve your financial goals.
- I want to fit in. Sometimes the worst purchasing mistakes come from peer pressure. It’s much easier to spend money when everyone around you is doing the same. Even if your friends would never dream of putting pressure on you, just seeing them spend money can influence your decisions. If this is a problem for you, then shopping should no longer be an activity you do with friends. Find other ways to socialize with the people in your life. Your bank account will thank you.
The best weapon you have against spending rationalization is to know yourself. If you are aware of the things that deceive you into purchases, then it will be much easier to avoid them.
And if you haven’t created a budget for yourself – that might be part of the problem. Learn everything you need to know about budgeting with our quick budgeting guide.
Article Source: Emily Guy Birken for Moneyning.com