EVER ASKED YOURSELF WHY WE SPEND SO MUCH , and how to stop before we’re broke? I love January sales, and getting things 50 percent off is great. Actually, I try to set up a sinking fund and do most of the spending at discount periods instead of hitting the shops on a monthly basis. The problem is, there are just too many temptations.
In my family, the time between October and January is tough. October kicks off with my birthday, November with my partner’s – plus Black Friday. In December, there’s Christmas. In January come the sales. If you want to take this further, you can say in February there’s Valentine’s Day, and you’ll end up spending five months in a row. That’s crazy!!!
Do we really need all that stuff? Below I’ll attempt to demystify spending and offer some solutions on how to curb the desire to sweep that debit card (or worse, credit card).
The hierarchy of needs
We are all familiar with Maslow’s pyramid, right? As humans, we try to fulfil the basic needs first and then move on to “higher” levels like esteem and self-realisation. I’d like to argue that buying hits 3 categories at once: safety, belongingness, and esteem. The level of safety includes financial and emotional security. We buy because we want to be like everyone else – thousands of years ago, being different could result in exclusion, with small chances of surviving alone. This goes beyond cavemen – if we just think about the Mediaeval times, we get the picture.
Next on the pyramid comes the need for social belonging. Remember that kid everyone bullied because their parents didn’t have the money to buy them the latest iPhone? Yup. Society influences us. We are constantly trying to keep up with the Jones’.
Past belonging, we also crave for status and recognition. What do you think is the easiest way to prove that you have made it (sometimes just to yourself?) By buying an expensive car, a Rolex watch, or a Hermes bag. People with self-esteem issues often attempt to fill up the void by overspending.
Advertising
Did you know that over a half a trillion dollars per annum gets spent on advertising? Brands know that the way you feel about their products determines how you spend your money, so they invest heavily in market research and endorsement. When something makes us feel good, we go ahead and buy it! It’s that simple. Buying releases a chemical called dopamine, known as one of the “feel-good hormones” (the other three are serotonin, oxytocin, and endorphins) which form part of the brain’s reward system. It allows you to perceive pleasure and keep coming for more. Sometimes just mere anticipation is enough to spike your dopamine levels. Big companies are aware of that and create engaging advertising campaigns. There is plenty of information on the Internet about it if you want to know more – you can read this article, for example.
Emotional fulfilment
We often consume food and goods to feel better, or as a reward mechanism. I can think of at least five TV characters eating a pint of ice cream after a breakup. I love to grab a glass of wine following a stressful day. Or get myself something nice when I hit a goal or finish a project. My first two months as a head of studies back in 2019 were so stressful I promised myself I’d buy a perfume if I survived. I did survive, kept my job, managed to hire some new staff, and all was hunky dory – so I went ahead and got that perfume. For some people the purchases a lot bigger. We get into a loop or rewarding ourselves, and very often even downtime involves spending. Going out with friends, or hitting the cinema with the kids. In the end, we just buy emotions.
The illusion of money
What is money? It’s ok, scratch your head. We all do. Not an easy question at all. Essentially, it’s energy with a symbolic value, but the tricky part is that nowadays, most of it is virtual. “Plastic money” it’s sooo easy to spend! Just put your credit or debit card to the reader, beep! and you have that product or that experience. No fuss. It’s been scientifically proven that cash is harder to spend because we can physically hold it in our hand, and it hurts to let it go (it hurts me, anyway); plus, it’s easier to keep track of your spending. That’s why they invented the envelope budgeting.
Sometimes we don’t even have to take out the credit card. Our devices remember the passwords, and shopping on Amazon or Ebay literally takes one click. Remember dopamine? Scientists say that online shopping gives 2 hits of this hormone instead of one: when you click “buy”, and when the order actually arrives. You are wasting virtual money to reward yourself, and then repeat because you are now an addict.
Our brain
We lend value to things around us. Time spent with family vs time spent at work; money invested in business vs money spent on a pair of jeans. Surprisingly, our brain doesn’t distinguish between emotional and monetary value. To make it really simple (primarily to myself, as you may know I’m strawberry blonde), our pre-frontal cortex produces the same activity when it calculates the value of objects (it’s called near-economics), and our feelings around things that make us happy. It’s sad but true, but whether we look at a photo or our best friend, or a new handbag, for our darn brain it’s basically the same. We are emotionally attached to things, full stop.
What to do?
Now that we know what’s going on, it’s easier to take some steps to avoid overspending. Yes, even in the light of the last section. We can modify our spending – as you know, brains can be rewired.
- Identify your triggers! Look at your emotions. What exactly is making me crave for chocolate? For that new pair of shoes? For a trip to the Maldives? Once you connect your feelings with the environment (the info you perceive through your five senses), you can change your behaviour.
- Identify your thoughts and ask yourself “Why am I thinking this?” Careful though: do not identify yourself with your thoughts. They come and go. You can choose.
- We know that we tend to reward ourselves with food and objects. A simple option is just to find cheaper alternatives. It’s better to buy a bottle of wine and have a glass at home watching Netflix than going out and spending money at a bar (if applicable).
- The dopamine effect: what else besides shopping provides you with dopamine? I don’t either, know, so I googled it and this is what I got: exercise (including having fun between the sheets), sleep, listening to music, meditation, and sunlight. So next time, instead of shopping online, it makes sense to go for a walk instead.
- Finally, the 24-hour rule for all shopping: wait. If you’re in the shop, put the object down and leave. You can always come back. If you’re on Amazon, put it in the cart but wait a little with the payment. Chances are, in 24 hours the initial rush has subsided and you don’t want that item anymore.
So here we are. We know why we spend, and how to stop spending, at least in theory. Our brains are complicated. Humans are complicated. Spending isn’t all bad and we shouldn’t beat ourselves up for it either, but in a world where literally everything is designed to lure us into spending money, it’s great to be aware of the dangers, get to know our behaviour, and take action to make the necessary changes. Shopping is like alcohol: enjoy responsibly.