Have you ever had your day ruined because you screwed up at work or had a family discord, then immediately seek comfort through window shopping (in which you ultimately ended up buying some items to lighten up your mood)? Have you ever felt so jaded to a fault that you attempted to browse something online and make an unplanned purchase? Are you easily drawn to flashy discount tags or 3-day sale posters at malls because you think that it’s a smart money habit, and that you’re actually saving and trimming your expenses?
If you answered yes to most of these questions, welcome to retail therapy my friend. As Simple Thrifty Living (2014) points out, “Whether you partake in retail therapy while you’re sad, angry, or happy, you are bound to end up with some unneeded items and an empty wallet.” , sinceyou self-indulgently spend money for short-lived purposes. If you feel that they are thwarting your financial goals in the long run, you might want to think again. Here are the seven financial fiascoes that you need to distinguish and get away from.
The “I’m in a bad mood, let’s binge-eat” habit
We’ve all known someone who tend to binge-eat when downright stressed or depressed, be it an expensive chocolate, a hefty bowl of ramen, an overpriced draft beer, an unreasonable number of imported junk foods and whatnot. While you may temporarily find solace on satisfying this type of cravings when you’re “emotionally high”, it doesn’t actually solve the root cause of your stress or depression.
Piece of advice: Rather than using this habit as an escape route, why not use it as a reward for your hard work and for painstakingly surviving a busy week or month? Have you received a recent commendation? Got promoted? Survived an arduous week of accomplishing a project deliverable? Go for a treat. You don’t say, “I need this treat”. Instead, tell yourself, “I deserve this treat”. Now that sounds way better and more empowering. By having a more positive and brighter outlook, you won’t have to resort to food addiction and feel guilty about it later.
The “I am bored. Let’s buy something” purchase
More often than not, we usually enjoy the convenience of online shopping these days. All we have to do is indulge in browsing our favorite categories and voila, we’re one click away towards our intended purchase. While its accessibility could be its greatest advantage, it becomes a catch when we buy out of boredom. For example, if your day is quite uneventful and you decide to dawdle your hours away by browsing anything random, fancy, or compelling in the Internet, you might as well drop by an online shop. You might bring up cliche dialogues like, “Oh, this one’s really nice, and not too costly. I’ll browse one more item then.” This habit starts circling, thinking that any small purchase won’t harm, but because you’re bored, you wouldn’t mind having them in bulk. The next day you won’t have much spare time, you check your savings and start to wonder how you blew your budget as nonchalantly as that.
Piece of advice: Stay away from malls, magazine brochures, or anything that will tolerate your emotional trigger on a frequent basis, most especially online shops. It doesn’t seem too obvious that you’re on a shopping spree because you don’t need to pay actual cash, when in fact, you’re silently depleting your savings or budget on a specific time frame. Instead, ignite your recreations. Engage in activities that stimulate your creative pursuit, one that you’re passionately curious about and one which you’ve decisively chosen to spend your money with. At least you can validate that you’re genuinely interested, not just because of mere boredom.
The “I can spend as much as what’s available” attitude
A very common mentality these days is that we’re entitled to spend as much as we can because we have more than enough. Most commonly heard Y.O.L.O mantras from young working adults would be, “I have not experienced buying these lavish and fine stuffs when I was student, so why would I deprive myself of these luxuries?” While that partially makes sense, how long are you going to fill those deprived days in the past?
Piece of advice: One thing that distinguishes grownups from students is their tendency to build long-term plans. While students are mostly confined within the crucible of school life, chances are they get easily preoccupied with short-term plans because they have to fulfill the ultimate goal of finishing their degree, and when you’d actually think that this certain phase has almost readied them for the real battlefield called adult life, you begin to understand that planning ahead is the strongest bedrock of a grownup life. So tell yourself this – you only live once, so make sure every risk and fiasco you make fundamentally counts towards creating the life that you truly want, because life is too short to make all sorts of mistakes. You can still live to the fullest and spend wisely at the same time.
The “I need to experience/have that too” mentality
With social media fueling the impact of latest trends nowadays, it’s quite tough to say no, especially when you’re one to enjoy conforming to those trends. One common example is when you come across an article, “Top 100 Must-Try Restaurants For Food Enthusiasts”, or “Confection Guide: The Dessert Cafes and Food Parks You Shouldn’t Miss.” With a mass feedback displayed online, what’s not to like or get curious about? It wouldn’t hurt adding them to your prospects on your upcoming pay day, eh?
Piece of advice: While it’s quite understandable that one of the reasons we go to work is to earn money and not starve to death, and that presumably there are things you genuinely want to try, you can make an oath of indulging in one fine dining every pay day. Trying them all at once is like gambling. You don’t know how much you’re going to check or cross out with this social media-labeled Top 10, so it’s not always a win-win situation. You will inevitably end up having your personal favorite anyway, so why the haste? Additionally, make sure that a higher percentage goes to your savings every cut off date then decide later. Now that’s the real win-win situation.
The “Can’t say no to my friends” expenses
When I landed my first job, I almost got to do this very often, especially when I were in that phase of establishing relationship with colleagues and newly found friends. We had frequent dinner hangouts, we go out and see movies, and if there’s a sole chance that we could afford the 4D ones, we’d willingly spend for it. We even went on regular shopping sprees and treated large fries and buffet meals like a normal breakfast setup. Looking back, I swore I’d do anything just to not go back on that kind of lifestyle, which goes kind of unhealthy on both ways- physically and financially.
Piece of advice: Learn how to say no. It’s not like you’ll oblige yourself to join them all the time. People have different financial capacities and have distinctive budgeting strategies. And it’s okay to not align yours to them. If these people are financially responsible, they’d surely understand why you had to miss one hangout.
The “N-Day Sale, N% Off. Limited Only, Buy Now” trap
Ever encountered 3-day sale promos from malls and shopping centers? While these bold, red posters encourage you to save money and spend less by buying their discounted items, it often translates to something else. Of course they won’t point blank tell the consumers, “Hey, you have to buy these now so we can quickly restock prior to meeting our target sales.” While one may think it’s a two-way profit, it becomes a disservice when a customer gets lured to these unnecessary discounted items and actually fall for it.
Piece of advice: Discount lessens the expense, it doesn’t wipe out the expense.You don’t get to save by buying a 50% off 1000-worth item. Technically, you still spent P500 pesos, and that’s a fact. Make a list of things you deem necessary at the moment. Never go to a grocery stall without your personal list. It’s a trap. Say you stumbled upon a buy-1-take-1 costly dairy product, when you only intended to purchase the regular brand you’ve always used. Don’t rush buying the discounted one. Remember, discounted items serve as bonus if you really need them, but they’re only regular items you thought were discounted at that time because it was an untimely expense.
The “I need to keep up with my living standards” expense
Say for example, you have to tighten your budget for the next three months because you decided to venture taking another crash course connected to your current profession, that which includes a myriad of fees (enrollment, daily allowance, projects). Previously, you could effortlessly hit the gym because you had no other priorities than to be better at work and continuously fund for your savings. Would you get your gym membership to a screeching halt?
Piece of advice: Priorities wise, if you welcome a new opportunity that would cost a significant amount in your savings, you might want to consider restructuring your goals and priorities, and reconsider other alternatives. Rather than hitting the gym, you can temporarily go for a daily jogging routine or watch online videos of basic dance tutorials instead of enrolling in an actual zumba class.
How many of these financial fiascoes have you experienced? Today’s the best time to get rid of them. Take your smart money habits to the next level and rewrite your future NOW!
Christian, or simply “Ian” to his friends, is a graduate of B.S Information Technology at Mapua Institute of Technology. He lives in Makati City and works as a Software QA in an IT company in BGC. Being in the IT industry, however, didn’t stop him from pursuing his passion to venture into the finance sector.