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Are you spending it like you stole it?

Turn on the TV; you can’t avoid the adverts. Open a newspaper or a magazine, and you’re hit full in the face by expansive, full-colour montages selling you the dream – showing precisely what you need to buy to make you desirable, to make you exceptional; to make you and your life perfect. Watch YouTube? 

Spend it like you stole it

Turn on the TV; you can’t avoid the adverts. Open a newspaper or a magazine, and you’re hit full in the face by expansive, full-colour montages selling you the dream – showing precisely what you need to buy to make you desirable, to make you exceptional; to make you and your life perfect.

Watch YouTube?  More and more videos are monetised in some way, with each subsequent video being carefully and cleverly curated to keep you watching.

Use Social Media? Have an online email account? Shop online? You’ll find marketing everywhere you look. Much of it laser targeted to your online habits and preferences about what you might desire.

Faced with continually being coaxed and coerced to spend, spend, spend, it’s hardly surprising that many people end up shelling-out way beyond their means using various credit devices. From credit cards and store cards, to buy now, pay later and low or ‘no interest’ credit, many will spend whatever it takes to try and emulate the idyllic lifestyles portrayed by advertisers and marketers.

They’re selling us the dream, a way of life, a persona, a status, an ideal perception of a perfect reality that we are all guilty at one point or another of believing we can, or should, have. And, whether we like to admit to it or not, we’re all equally guilty of believing the hype. Of being convinced as, of course, the intention is, that we don’t merely ‘want’ what is on offer but that we actually ‘need’ it.  Really, really, need it!

Smart marketing tactics successfully and skillfully create a desire, transform that desire into a want, convert that want into a ‘must have’ and ultimately convert that ‘must have’ into a need.  And we don’t even see it coming.

So we buy.

We buy things we probably don’t need, very often with money we don’t have.  As if money is no object. As if we just stole a fortune… and it’s burning a hole in our cash-sack… and we simply must spend it!

becoming a regular saver

It’s no wonder, when it comes to putting our hard-earned cash aside for the future, we often pull out empty pockets and declare that we simply can’t save because we don’t have the disposable income.

But, when was the last time you reviewed your spending habits?

Here are a few bad spending habits that we’re probably all guilty of at one time or another.  Try asking yourself how true these are for you.  If you find yourself doing a fair amount of nodding you might be able to increase your future wealth by questioning your spending habits and motivations.

1. Impulse Buying

A friend of mine recently told me a story over a wine and pizza:

His wife sent him out to buy a carton of milk.  He returned quite a while later with a giant gas barbeque.  He’d forgotten the milk.

I asked him why he’d risked the couch at best, and at worse a divorce, for a barbeque.  He told me that while looking at the milk, he’d been distracted by the barbeque display across the aisle.  There was an unusually large one ‘glittering impressively’ in the middle of the display – all wood, cast iron, and stainless steel.  The holy grail of barbeques; and he’d just seen himself in the garden cooking for…well…everyone really.

And that was that. He had to have it.

With a shake of her head and a shrug, his wife said “He’s always doing things like that.  I think I was actually more upset that he’d forgotten the milk.”

The challenge is that impulses are difficult to curb.

But is it really an impulse, or do we merely act impulsively?

If you get the urge to act impulsively and buy on impulse, try to force yourself to stop, think, and ask yourself;

  • Do I have to do this?
  • Can I afford this?
  • Do I need it?
  • If I buy it, will it stop me being able to afford what I really need?’

…like saving for my future…

…or coming home with the milk.

2. Buying the newest version of everything

Buy a new mobile phone and almost before you’ve had a chance to show off your new-found status in public, the next version is being leaked to the media. Your brand new shiny phone is suddenly old, and defunct before you’ve ripped the cellophane off and had the chance to go for that epic ‘unboxing’ video!

But, don’t worry, all can be solved by just buying the latest and greatest, all new, bells-n-whistles, thinnest bezel version coming out in a mere four, or six, months…and now, even though you don’t really need the new-fangled version…you want it.

Sound familiar?

Imagine how much you’d save if you skipped a version, or two versions, or three.  Imagine how much you’d save if you kept the mobile phone you have, the TV you have, the tablet you have, the laptop you have, the car you have until it no longer worked; until you really need to buy a replacement.

In the western culture cars, on average, are changed every four to five years nowadays. Even when you’re on the verge of buying the new model that came out a mere seven months ago, you’re told ‘you might want to wait; there’s a newer model coming out in five months.

To a certain extent, this is akin to the ‘grass is greener syndrome’ where we imagine our lives will be improved by changing what we have for something we perceive as better.  The secret is to know the difference between a ‘want’ and a ‘need’ and to put your wallet back in your pocket when it’s not truly necessary.

3. Multiple items you’ve never used

A have a draw containing watches in my bedroom.

I don’t wear watches.

I don’t know why, but I went through a phase of buying watches even though I hate wearing them. If I saw one I liked the look of in a sale then another watch went in the drawer.

The point is that often motivated by sales, we tend to buy things we really don’t need and virtually stockpile them, very often not using the item(s). Clothes and shoes are often the culprits here, but they are not the only items:

The bottom line here is that, if you don’t need it, don’t buy it.  I’m pretty sure if I’d saved the money I’ve spent of watches I don’t wear over the years, I could have put that money to far better use.

4. Only buying champagne by the bottle

Okay, so this isn’t really about buying champagne per se unless, of course, you happen to drink a lot of bubbly. It’s more about saving money by buying things you use a lot of in bulk.

If you were buying toilet rolls, for instance, would you buy just one at a time?  Probably not.  Economies of scale would mean that buying a toilet roll each day or two would work out a lot more expensive than buying a jumbo pack of thirty-six at a time.

The message here, though, is to apply the ‘buy in bulk’ principle within sensible reason by buying, in bulk, anything you use in bulk. This doesn’t apply to shoes or watches.

It makes sense to reduce your annual spend on groceries in this way, so you can use the amount you save elsewhere.

5. Shiny Object Syndrome

The ‘Shiny Object Syndrome’ is a little like ‘buying the newest version of everything’, but it’s a phrase coined by the well-known entrepreneur Dan Lok.  It describes the reaction many people have to the avalanche of self-improvement programmes, get-rich-quick schemes, must-buy software, and must-read e-books that deluge us at an ever-increasing rate.

People, very often, buy such things with the idea of using whatever they obtain to improve their lives. Then, rather than use what they’ve just bought, they get distracted by the next big idea, the next ‘shiny object’, and buy that instead.

Dan explains that the reason people do this is because the act of purchasing feels like they’re doing something positive; doing something to reach their personal goals.  The reality is that ‘shiny object syndrome’ is just self-deception. It is thinly veiled procrastination whereby the majority of individuals invest an inordinate amount of money without actually changing anything.

The reality check here is in examining your perception of what your life actually looks like in comparison to, for example, the two-thirds of the world’s population who live on two dollars a day. For them, our lives in comparatively affluent western society are the ultimate dream. From their perspective; we are already wealthy.

Rather than trying to achieve a level of happiness only at the end of our journey, a better approach might be to enjoy the journey itself. In other words, experiencing gratitude for what we have and creating our future from that perspective.

This might very well mean that our investment in our future, and the ability to, as Amy Landino would say, ‘Go after the life that YOU want’:

How a spending habit review can help

We have only discussed a few of today’s pervasive spending habits but there are plenty more!  The common element in all of them is a lack of conscious awareness about how present spending affects future planning. When you engage with current spending you start to take charge of your future. Curbing spending and putting the money we save aside, coupled with a little early planning, is more likely to reap a far healthier harvest.

If you’d like to talk to someone about Financial Planning, and investing in your future lifestyle, please get in contact; we’d be delighted to hear from you.