We have all been there. You have just seen a must have item and the urge to run in and buy it kicks in.
Many people find it hard to refrain from spending and will convince themselves, often with the most flimsy excuse, they just have to have it.
It can be hard to walk away from buying the latest fashion handbag, jeans or tech gadget, particularly when we are bombarded with so many messages telling us we just have to have them.
Michael Radalj, independent financial planner at yourprivateadvisers.com says, we are largely hopeless consumers and we still believe spending will provide happiness, even though we know deep down it doesn’t help us at all.
Below are four tips to avoid falling prey to unnecessary spending.
It’s on sale
This has to be one the best excuses.
Whether its a international flight, new jeans or a television, it is easy to get caught up in the hype and fall for marked down prices, but a sale item is only a great buy if you genuinely need it.
Mr Radajl says, the “on sale” slogan is one of the biggest tricks in town.
“We are puppets to the marketing tricks played on us at all times, such as 50 per cent off already exaggerated prices or selling items at prices just below a larger round number,” he says.
Unfortunately, these tricks have been proven to work and are being played out with us on an ongoing basis.
It’s an investment
Radajl says this is justification at its worst and suggests simply living in denial.
It may be an investment to shore up some short term feeling that a new outfit, couch or a must have item may help, but, rarely would spending be anywhere close to an actual investment in the true sense of the word.
At the end of the day, your bank account will have less in it and that is probably a poor investment.
It’s a one time only offer
Perspective Financial Services financial adviser Esther Althaus says it’s easy to get caught out with this one when you see a must have item staring at you through the shop window or on television enticing you with, “pick me, pick me”.
You convince yourself that if you do not buy it then and there, you are never going to find anything like it again and at that price.
Do your research and do not be fooled, as things are very rarely only ever one time. Be specific about what you need, as opposed to want. Is the item available else where? You might even be able to find it at a cheaper price.
I deserve this
Telling yourself spending is a reward is a good old pick-me-up, says Ms Althaus, an AMP financial adviser.
“You’ve had a tough day and just need to do something that will give you a bit of a boost. So you go out and get your quick fix. Feel great for a while and then realise that you just blew more than you intended for something you don’t even like that much. Back to feeling down again.”
There are times we need to do something to make ourselves feel better or even act as a reward for an achievement.
Don’t be too hard on yourself – you probably deserve a treat, but if you’re going to spend the money, then consider something that will have a long-lasting impact.
Go for quality and buy something you will cherish as a reminder of your achievement. Helping others can also be hugely satisfying, so next time you feel the need to splurge, find a charity that is close to your heart and donate.