Getting Out Of a Spending Spiral When You Feel Like Money Is Beyond Your Control
It's the Summer of 2020, and things sure have been hella weird so far. Whatever your lockdown lifestyle may have entailed, going back into the 'normal world’ definitely feels a bit strange. While many of us have vowed to be more frugal post-pandemic, just as many are caught up in the excitement of reopened shops and restaurants, spending money on things we've held back on on spending for months. There's definitely nothing wrong in indulging in your non-negotiables — but if you feel like you're living above your means, and you have no real handle on your spending, it's important to acknowledge this is a problem and take back control.
There are countless reasons we buy more stuff than we need. Some motivations are pushed upon us by our parents’ spending habits, how we were raised, marketing ploys and society at large. But other reasons seem to stem from our internal motivations. Either way, arriving at a healthy understanding of why we buy more than we need is definitely worth the effort. If you haven't heard of the Diderot Effect — listen up. This was named as a motivation for overconsumption, originally noted in the 18th Century by a French philosopher named Denis Diderot. The simplest description of the Diderot Effect is this: “the introduction of a new possession into a consumer’s existence will often result in a process of spiralling consumption.” In other words, the purchase of one new item often leads to the purchase of another.
This is how you can take certain steps to curtail this problem:
1. Identify your triggers: A spending trigger is something that happens that gets you to spend money. It's usually an emotion — be it happiness because you just got a promotion, sadness because of a loss, or frustration because of a situation that's beyond your control — that in turn gets you to spend money on something you don't need and, in some cases, don't even really want. Instead of dealing with whatever it is you’re feeling head on, you turn to spending money to mask the feeling. Sometimes, triggers are less to do with our feelings and emotions and more to do with marketing tricks that are used on us.
2. Practice delayed gratification: Putting off what we want now to buy it later is one of the key components to financial success. Having the patience to not spend money now and save for later can be hard, but it pays off. Investing is one way to put off spending now to receive something better in the future. Just remember that putting in the time and effort today can pay huge dividends for the rest of your life. Once you start getting into the habit of delayed gratification, it gets easier with time.
3. Embrace mindful, slow spending: The term slow-living is somewhat self-explanatory, but what does it mean exactly? While interpretations of the slow living lifestyle vary from person to person, the general idea is to live a life more intentionally, more mindfully, choosing quality over quantity and taking the time to slow down and enjoy the simple pleasures of life. COVID-19 has been helpful in aiding people to recognise what's important, so let's hope this outlook is here to stay!
4. Forgive yourself: Sure, forgiving yourself can be really hard. But staying angry at yourself doesn’t get you any closer to your financial goals, so it's important to remember that your past doesn’t determine your future (unless you let it), so forgive yourself for your mistakes and move on.
5. Create a tracking process: Whether it's keeping a money diary where you note any money you spend (or earn), and write down what you bought, how much it cost, and how it made you feel, or you set a weekly money date to go over your spending and use a spreadsheet to track the process, staying on top of your money is essential. It might feel stressful at first, but once you get into the swing of things, it'll become second nature.