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Home News Understanding the Psychology Behind Spending

Understanding the Psychology Behind Spending

Posted on | Categories: Personal Finances, Savings

Understanding the Psychology Behind Spending

The words “budget” and “exercise” can often be put in the same category—both are necessary for a healthy lifestyle but are far from fun.

If you have trouble sticking to a budget, you’re not alone. There are some very powerful reasons why human beings feel compelled to spend money—and there are some things you can do to psychologically trick yourself into spending less.

The Need for Control.

A study in Journal of Consumer Psychology found that compulsive shopping was linked to a need for control. Those momentary feelings of happiness associated with a new purchase weren’t linked to the item itself but to the sense of control a person felt about their life in that moment.  

The Need to Compete.

It’s true—we really do feel the need to keep up with the Joneses. Advertisers know this, so they often play on our desire to be like the people in their ads and on our fear that we’re falling behind our peers. This includes tapping into our need to look our best, be recognized and accepted by others, taking control of our health or being loved.  

What you can do about it.

Luckily, you don’t have to let your brain trick you into spending more than you should. A few ways you can fool yourself into spending less include:

·         Only carrying cash. Decide ahead of time how much you will need and stick to that.

·         Don’t shop when you’re in a bad mood.

·         Scan your social circle. Are your friends pressuring you to spend beyond your means?

·         Identify where you spend the most money and take steps to resist temptation. For example, do you spend too much eating out? Make sure your pantry is stocked so you won’t be tempted to spend too much at restaurants.

·         Question yourself as you go to make a purchase. Are you really happy about that new TV, or are you trying to escape a problem at work or home?

While we’re hardwired to want to spend—especially in our consumerist society—a little bit of planning and restraint can go a long way to keeping us on financial track. Fairfax State Savings Bank can also help you stay on track with a variety of banking products. Give us a call or stop on in today!