Psychological Triggers That Cause Overspending and Ways to Deal with Them

Saving is extremely crucial, especially when the economy is absolutely uncertain. You all have learnt this lesson after the pandemic. However, many of you are still struggling to manage your finances.

Most of the time, spending is the result of psychological triggers. For instance, you have seen a sale offer “50% off”, you think of buying that thing even if you do not need that. The psychological trigger, here, is saving money.

You think that you can save half of the purchase price. However, if you think the other way around, you will find that this kind of shopping does not lead to saving money but to overspending.

Psychological triggers that cause spending and ways to fix them

Here are some psychological triggers that can result in overspending along with the ways to fix them.

  • Shopping pleasure

Not all but there are some people who get pleased after shopping. This is because dopamine, a happy hormone, is released in them. In other words, you can say shopping high.

It usually happens when you have a reason to celebrate something, or you are getting bored. For instance, you have got a promotion in your job, so you can decide to celebrate that moment. You will rush to the shopping mall. You are being bored at home alone, so you call your friends up and then go to the shopping mall.

How to fix it

If you reach out to your credit card to shop for something due to any reason, you should wait for a moment and ask yourself if that is urgent or that is the only way to celebrate something or divert your mind from monotony.

Brainstorm some ways how you can avoid shopping. It would be best if you try to break the monotony or celebrate special moments by doing something else.

  • FOMO

FOMO is fear of missing out. You have witnessed the Black Friday sale. You know that a big sale is going to happen at reduced prices. When you see such sales offers, you have a sense of competition.

You think that a lot of people are out there who want to win that sale offer. As a result, you start rushing to the market. “Oh that is great, you have won” is what you say yourself after buying that thing.

How to fix it

First off, you need to realise that you never need to compete against someone to buy something no matter what. It is not a game that you will win a prize if you buy that thing.

If you do not change this behaviour, you will likely keep spending your money. As a result, you will start running out of money, and then you will start borrowing money to fund shopping.

Taking out guaranteed loans for bad credit may be a good idea if you need to fund an emergency, but it can be very dangerous for your finances if you are funding your regular needs.

  • Saving idea

You have seen a thing displayed in the shopping mall with the tag “40% off”. You start rushing to the mall to buy it. This is because you think you can save 40% of the purchase price. If that item is £1,000 and you are getting 40% off, you can save £400.

This is such a big amount of money you can save. When you interact with these discount offers and special schemes, you think that you are going to save a lot of money. The idea of saving is a psychological trigger that forces you to buy things.

However, this is where you slip up. When you get these offers, you tempt to buy even those things that you do not need, and if you are buying what you do not need, you are simply overspending. This is a complete waste of money. You are not saving worth £400 – in fact, you have spent double or probably three times more than £400.

How to fix it

When you come across these offers, you should think that that just baits to attract customers to get money out of their pocket. Further, it would help if you understand the fact that a smart buyer is one who buys things when they need them.

It is surely not a good habit of buying unwanted things just because they are on sale. You are not saving money. You are overspending instead.

The bottom line

There are several psychological triggers that cause you spend money on goods that you do not need. You think that you are saving money but actually you are overspending.

This is why you often find yourself running out of money at the end of them month. It is always suggested to change your behaviour, so you take out loans with no guarantor only to fund your emergencies, not your regular expenses.

It will be better if you try to create a budget and make a saving plan. Try to stick to the plan, so you know how much you have to spend. If you come across any offer or scheme, you should ask yourself if that is urgent to buy. If it is not urgent to buy, you should not. Instead, you should utilise that money for any other essential expense.

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