I just need to be more disciplined with money

The other day I found myself sipping on a Pistachio latte ... and absolutely regretting my purchase.

And because I’m all about introspection, I asked myself:

·        What about this simple experience was bothering me?

·        Why did I buy it in the first place?

The answer to the first question was that I was bothered by the price I paid vs the value I got: 6.5 euro for a latte that was of meh quality actually did not seem like a good deal to me. Fine, lesson learnt.

But the answer to the second question... Turns out I actually couldn’t recall the moment I consciously decided to buy the thing.

I was operating on auto-pilot, feeling stressed, and in need of a sugary boost.

So when a few minutes later I saw the cafe and their ad for the limited-edition Pistachio latte, I didn’t think. I just walked in and bought it.

This seemingly mundane experience made me stop and think: how often do I observe it happening with clients during coaching sessions that they regret their purchases?

Quite often.

And it shows up in the form of fairly harsh self-judgements such as:

·        I’m an impulsive spender

·        I’m bad with money

·        I just need more discipline with my money

So I decided to explore this topic of emotional spending in this newsletter. Specifically:

·        Understand the psychology behind it and how we can work with it

·        Why ‘more discipline’ is not necessarily the answer; aligning spending with our values is

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The psychology behind emotional spending

Quite simply, our brain has evolved to reduce pain and increase comfort for the organism it inhabits.

No wonder we then fall for:

●       Late-night online shopping after a stressful day

●       “I deserve this” purchases after conflict or failure

●       Buying status items after feeling inadequate

●       Rewarding ourselves after productivity bursts

Add to this external triggers so effectively designed to get us shopping, such as targeted ads that are algorithm-driven, limited-time offers and buy-now-pay-later schemes.  

And the fact that the anticipation of buying something activates dopamine reward pathways in our brain which often give us more pleasure than owning the thing itself.

And voila! The perfect combo for mindless, needless spending.

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Work with your psychology, not against it

As it often is with human psychology, it starts with awareness.

Awareness of what usually triggers you to buy the thing in the first place.

Is it stress, loneliness, boredom, anxiety, low self-worth, social comparison?

Do you even know?

If you don’t, try journaling for a week. Every time you catch yourself feeling guilty or remorseful about a purchase you just made, write it down.

And try to go back a few steps before you bought it, to how you were feeling, what time of day it was and what circumstances it happened in.

You’ll be surprised by what such a simple one-week journaling can reveal.

Once you have awareness of your emotional spending triggers, it’s time to get good at anticipating them and building in some contingencies.

Look at your calendar for the week ahead: what events are coming up that might trigger you?

For example: will you catch-up with a former colleague that you believe is more successful than you, having a better job, being better dressed? And so you end up buying a new expensive outfit just to feel like you measure up?

Knowing that is coming up, what can you already do now to reduce the likelihood of falling for that trap and not waste your hard-earned money?

Perhaps it’s spending a quiet 30 minutes in a park right after the dinner, just walking and relaxing, so you don't feel the need to buy an outfit to prove your worth.

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Aligning spending with values

"I just need to be more disciplined with my money."

Whenever I hear people conclude that about their spending, my Spidey senses go up.

Because after some digging, it’s almost never about a failure in the person’s character, and all about their spending not yet being fully aligned with their values and there not yet being a system fully fitting the rhythm of their life and finances. 

Think about it: if you are clear on your top core values, and your money is spent (for the most part) on those, how would that feel?

Same as when you spend your time in alignment with your core values, spending money would feel a lot more meaningful and freeing, and not like a shameful waste.

So here's the last thing I want to leave you with: what are your top 3 core values, and does your spending reflect that? To find that out empirically, look at your purchases for the last 2 weeks and categorize them accordingly. For example, if you paid for a gym membership, is it because Health is a core value?

Then look at your next upcoming 2 weeks and try to anticipate your purchases: if you are going to have dinner out with friends, is it because your core value is Relationships?

And which core values are NOT being funded at all? Not lately, and not planned in the future?

Could you cut one upcoming purchase that doesn't align with a core value, and redirect that money?

For example, if you've been eyeing new shoes on Zalando because you are bored with your current ones, but what you really value (and need) is Wellbeing, why not redirect that money to some self-care? Or invest it if what you value the most is Freedom?