Tuesday, July 16, 2024

How to control your spending
by Art Graham
Art Graham has an MS Degree in Accounting and has worked in Accounting and Finance for close to twenty years. He enjoys the field of personal finance and enjoys bringing good money saving advice to people on the internet. He is also an expert in the field of Accounting and Manufacturing Software. For more great tips on saving and cutting costs, check out his website, CostSlayer.com.

Art Graham

In order to control your unnecessary spending, it helps to understand why you spend. Spending money is often not the problem, it is often the symptom of something else. Let's take a look at three reasons people spend money and see if we can find ways to control them.

When I was in grad school, I was sitting in an accounting class one day, and Vicki, who sat in front of me, turned around and asked me how my day was going. I said 'Oh, fine, except that I spent way too much money this morning on cd's.'

'Yea, I used to spend too much too, while I was working' said Vicki.

I thought about this for a second, and then I asked, 'Why did you spend more while you were working?'

I could have sworn she would have given me the standard answers like:

'I needed new clothes to look good' or 'I had to find babysitters' or 'I needed a new car to impress my clients' or 'I always ate lunch at a restaurant' all of which are indeed, valid reasons you might spend more while you're working. But, no!! What she said was 'I wasn't happy and I always spend money when I'm not happy.'

At the time, I just shrugged it off as 'Oh that's interesting... How's your thesis coming?'

In other words, I didn't give it a thought.

But that was years ago...

Then one day, I was feeling depressed and went to the mall and started buying stuff I didn't need or really even want. Then it dawned on me...Vicki was right! It took her a lot less time to realize why she spent money than it did me. I'd always assumed that since I'm not normally a melancholy type person, I wouldn't / didn't suffer from that same fate. But the truth is, even I spend money when I get sad or lonely. The difference is that now I recognize it. The truth is, people spend money because they're sad, and spending money on clothes, a car, makeup or whatever it is really can, for a few minutes make you forget whatever it is that is making you sad. It sort of 'brings you out of yourself' and transports you to another place. In simpler language, it makes you forget about yourself for a few minutes and helps you think of some other object or subject.

The real problem here is not your spending, but your sadness; if you can solve that issue, then the unnecessary spending will stop (or at least slow down).

Not being a psychologist or a therapist, I can't really offer any professional advice, but one thought has occurred to me.

The real reason spending helps you feel better while you're sad, is because you forget about yourself or your problem. It seems to me, then, that you should do something to help you forget about yourself or your problem, other than going to the mall. Try working on a hobby or developing one if you don't have one. Go to a movie. Take a walk through a park. Go for a run. Visit a nursing home. The bottom line is try, with all your might, to do something productive. Wash your car. Call your mother. Create a web page or a blog. Do something to 'forget about yourself' for a while.

Another reason people spend unnecessarily is what the economic whiz bang kids call 'impulse buying'. Sadly, I see it in myself too. The other day I was in the grocery store, eyeing all the candy in the checkout lines. I was reaching for an Almond Joy, when that good little voice in my head said 'Whoa, dude!! Did you come here for an Almond Joy?'

'Well, no' I said. 'I came here for a loaf of bread and some milk'

'Well then... what the heck are you doing?' said that little voice.

'Oh, I don't know' I said. 'Maybe I want to enjoy myself, for a change!'

Anyway, surprisingly, my little voice won. I put the candy bar back and realized what I was doing. Those marketers in the store are smart. They know that if they put that candy in the aisle where we checkout, that a large percentage of us will reach out and touch!

The way I combat these marketers now is by training myself to recognize it when I see it. If you can recognize when you are being manipulated, it is much, much, much easier to resist. Why, the nerve of those marketers! So now, instead of letting your mind wander while you are in the checkout aisle, start thinking things like 'Hmmm, I wonder why they put Almond Joys in the checkout line?' 'I wonder why they put that special display at the entrance to the store?' 'I wonder if they did that to get my money or because they really care?' Try to recognize when you are being manipulated.

Finally, a third reason that people spend money unnecessarily is because they are bored. Once again, I see it in myself. If I have nothing to do, my first thought is, 'I know! I'll go to the electronics store and check out all the new fancy, shmancy stuff.'

I know this will come as a shock to you, but I really don't go because I want to find out what new products exist or even to learn about them. No, sadly, I go ONLY because I'm bored. Now, going to the store when you're bored is not what you should do if you're actually trying to save money or reduce your spending. Why, you ask? Because it is putting yourself in 'harms' way, economically speaking. If you don't want to eat poison, don't put it in your food pantry. If you can't swim, don't jump in the ocean. If you can't resist all the glitzy, appealing and attractive merchandise, don't go to the store. Recognize that you're bored and address that by some other means. Call up a friend. Work on your household budget. By now, you get the idea. Do something productive.

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