It's so easy! You're out shopping with friends and you find the shoes you were thinking of the week before - and they're on sale. Or you had a busy week (or month) and you didn't realize how many times you went out for fast food until the bill comes at the end of the month. Some of us face a broken water heater and an expected car repair in the same week.
There are untold reasons that we spend too much.
Let's break them down into two categories. The first category is what we could call life stuff, and it just happens. There is very little if anything you can do about it. Whether you can minimize these expenses is a different question, but we won't discuss these expenses here.
Category two is what we could call discretionary spending. This is where we all struggle. Think of the candy and magazines by the checkout line at the grocery store. Retail managers know it's very hard to resist these impulse purchases. What are some reasons we struggle so much in this area?
One reason is that we live in a consumer culture. Economists estimate that most of the gross domestic product of the US is consumer spending. Not all of that is discretionary of course. But those of us who have grown up or lived in another country can recognize how much of our US culture is consumer driven.
Peer pressure is also powerful, and it doesn't affect just teenagers. Adults also struggle with the desire to keep up with what the rest are wearing, eating, doing, spending their money on. It's normal to want to fit in, and it takes a lot of mental strength to resist the tug of friends and family in the area of consumption.
We also want it now. Some of you may remember the concept of layaway. The difference now is that you can sit on the sofa tonight while watching the game; you just finance it on a credit card rather than making payments while the store holds it in their warehouse. Of course the difference is the interest rate you pay.
Emotions also play a part. I think we all would admit that buying new things is fun. Who wants to go to the mall and not buy something? But sometimes we also shop to fill an emotional need, make ourselves feel better after a hard situation, or to present an outward appearance which masks our true financial condition.
These are all powerful forces, and we would be unwise to underestimate their influence.
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