I've had trouble sticking to my budget over the past few months.
Some of the overspending was due to changes in my family's needs. I spent a lot more on childcare this summer because summer camp in my neighbourhood was only offered on a part-time basis. That meant more money spent on a babysitter for my kids while I was at work.
But part of the overspending was because of changes to my wants. More time confined to my home led to splurging on a new bed, duvet and sheets. When we could leave the city, I spent on a short trip nearby with the kids. I also shelled out more than usual on clothes, food and exercise.
I think I spent on these things to feel good. Because let's face it, life in the past few months hasn't felt that good for a lot of us.
Spending Can Feel Like Chasing a High
It's all part of the "hedonistic treadmill of chasing that high," says Dr. Megan McCoy, a professor at Kansas State University who teaches financial therapy – a field that applies mental health and psychology to personal finance.
It's part of our brain chemistry. We spend for that quick hit of happiness, but it doesn't last. So we spend some more to get another hit.
That explains something I noticed happening as I was spending; it was like the floodgates had opened. Overspending on one thing made it easier to overspend on something else. It seemed like a snowball effect that became hard to overcome.
The Reasons We Overspend
Natasha Knox is a fee-only financial planner based in New Westminster, B.C., with a graduate certificate in Financial Therapy. Knox says the "quick happy hit" of spending meets a psychological need, like the need to conform or to feel a sense of control. Sometimes people spend when they're anxious or sad or angry, and they shop to avoid uncomfortable feelings.
"To an outside observer it looks the same, but the reasons can be diverse," Knox says.
Knox suggests three ways to approach problematic spending:
- Recognize this behaviour has been in service of a need, then try to articulate what that need is. Is this a need that can ever be filled by money? Some examples of needs are: belonging, justice, solidarity and understanding. Knox reminds us to have compassion for ourselves when we look at this aspect of our spending. "People bash themselves," Knox says, which doesn't work.
- Make a list of your emotional triggers. When do you overspend? Is it when you're angry, sad, before a fight, after a fight, bored, with a specific friend, by yourself? Look at the reasons you give yourself to spend, like "It's for someone else!" or "It was such a great deal!"
- Start keeping a journal of how you feel before you overspend and after. The next time, before you spend, try to think of a different strategy. For example, if the root cause of your spending is boredom, you could call a friend, or go for a walk or do a hobby instead.
As for myself, I recently met with my own fee-only financial planner to go over our plan for the next six months. I have a clearer idea of my priorities and my limits when it comes to spending.
I'm going to cut myself some slack for the past few months of overspending, but I'll also do some soul searching to be more aware of why I spend when I do.
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