Big Apple, Big Bucks

Christine Whelan | Posted on 05/04/10

After a few days in New York City, I've run the errands I need to run... and I've run out of money faster than I ever thought possible. Since I'd just finished some research on thrift prior to my trip to the city, I thought it might be fitting to remind myself -- and others -- of some very basic reasons why we get parted from our money in un-thrifty, un-necessary ways:

Problem: Once I start shopping, I just don't stop.

Solution: Don't Break the Seal: You know the crass saying about not "breaking the seal" when you're drinking-because you'll be going to the bathroom all night long after that? Well, research shows that it's actually true with spending: Buying one thing-even one small thing-tends to open the floodgates for more purchases.

Problem: I'm constantly rationalizing my purchases.

Solution: Be smarter about comparisons: When we are comparing the purchase of a TV, we look at the price of a Panasonic versus the Toshiba versus the Sony models, right? And in that scenario, we end up spending more because we think, "hey, for a few extra bucks, I can get a much nicer TV." But psychologists urge you to think about money globally-as in,  "what else could I buy with the difference in the price of TVs?"-and you are less likely to be talked into a more expensive model than you really need.

Problem: I'm dashing around in a panic, skipping meals, irritated at the traffic...

Solution: HALT: Are you hungry, angry, lonely or tired? Are you anxious, depressed, stressed out? Take a break before spending money on anything to address your real issues. Research finds that emotional spending doesn't make us happier in the long-run, and when we're in an emotionally compromised state, we're more likely to be distracted by the shiny new trinkets all around us that whisper "I'll make it all better..." 

Now, if only I'd remembered that a few days ago...




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