Why do we Overspend

    Today was one of "those" days.  It was the day the FFA animals were loaded up and taken to the fair.  I took Megan and her friend, Holly, to the barn at 7:30.  As we were pulling in Holly asked if I was taking them to the fair.  I said I was, thinking of the coming days, and asked Holly when she wanted to go.  Her answer was to tell me to wait because it wouldn't take long to load the animals.  Oh.  I had no idea the kids were going to the fair.  Neither did Megan, so we were caught completely off guard.  We had already talked about taking drinks and some food each day so that cost would be eliminated, but with no warning food and drinks came out of my pocket and we were there all day.  It was a hot day and we were thirsty.  When all was said and done, I was left with a sick, guilty feeling and wanting to kick myself and that was with being blindsided and not having any other options.  It did get me thinking though about spending more than we should and why we do it.  This is what I came up with.
  1. Filling a void.  Maybe there is something missing in our lives.  Our job isn't fulfilling.  Our spouse doesn't give us enough attention.  Our family relationships aren't what they should be.  Whatever it might be, spending money fills that void.
  2. Wants vs. Needs.  The media is constantly telling us we need the newest, greatest, latest product.  In the past (and still in many parts of the world) people spent the majority of their time taking care of basic needs to survive.  With all our modern technologies we have a lot of spare time to think about what we want.
  3. Disorganization.  Many of us have cluttered cupboards, closets and cabinets.  We don't know what all might be in there.  How often have you bought something you thought you needed only to get home, put it away.....and find out you already had one in the cupboard?  It's happened to me.
  4. Credit Cards.  Back before credit cards there wasn't a lot of buying on credit going on.  Perhaps an account at the store that was paid off monthly or a mortgage.  Plastic now makes it waaaay too easy to buy something right now.  Now saving up required.  No thought about how to pay for it.  No thought about how much is being spent until the statement arrives.
  5. Children.  I admit this is a huge hot spot for us.  First, there is the pressure from our society which sends the message that if our children don't have every gadget, every advantage, brandname clothes, etc., that they will be social failures.  We are not good parents if we don't provide.  Then there are the kids themselves, who the media spends a lot of money to target.  Our kids want all this cool stuff.  And they want it now.  They are an instant gratification generation.  We are mean if we don't buy what they want.  How can we deprive them?  Everyone else has one.  It is hard sometimes to listen to all the begging and know that in large part, everyone else really does have one.  We don't want our kids to be social outcasts or fall behind acedemically because they don't have the current technology.  My husband has his own issues with this one.  He grew up as one of seven children and the family was poor.  Many Christmases all they got was new socks and underwear.  He sees being able to give his kids luxuries as being successful....and being far away from where his parents were financially.
  6. Changing technology.  In our world, we no sooner buy an electronic gadget than it is obsolete.  Or at least that is what the advertisers would have us believe.  Sometimes that is true, but most of the time our out of date equipment will get us through for a good while yet.
  7. Convenience.  It's nice to sleep in a little later and grab that egg mcmuffin or latte on the way to work.  After a long, hard day we're tired and who wants to cook when we're tired?  All those restaurants offering take-out sure make it easy to take it easy.  And we don't even have to leave our homes to shop any more.  Just pick up the phone or hop on the computer.
  8. Keeping up with the Jones.  Let's face it, we're competitive.  We hate when our neighbors show off their new stuff.  We want new stuff, too.  We want to be seen as being at least as successful as the Jones, but if we can manage a little bit better stuff than they've got, so much the better.
  9. Lack of financial goals.  Very few people make goals for their future.  We all talk about what we hope our futures are like, but how many of us honestly have a plan in place to make it happen?  Of the people I know?  Next to none.  In fact, most of the people I know who are my age figure they will never be able to completely retire.  They see a future of having to work at least part-time to make ends meet for as long as they are physically/mentally able.
  10. Total Cost vs. Monthly Payment.  This comes back to the whole credit issue.  We drive past a car lot and see a pretty new car sitting there with $300/month painted on the windshield.  Hey, that's not so bad!  We can manage that.  Yes, but when you take a look at the big picture, the picture that looks at the interest paid over the term of the loan, the picture changes a bit doesn't it?  Interest adds a tremendous amount to a loan and why not, because that is where the lender is making their money. 
    So, what can a person do to avoid some of these things?
  1. Ask yourself why you're buying something.  What is motivating you?  Is there a real need?
  2. Wait a day or two on small items (a week or more for big ticket items).  Take the time to reevaluate your desire.  If you still need it, buy it, but only when you can pay cash.
  3. Research new technology.  Is it really that much better than what you already have?  Is what you have now still doing the job?  Will it keep doing the job?
  4. Keep a spending log.  Write down every penny you spend so you can see exactly where all your money goes.  It's an eye opener for most people.  We fritter away a dollar here and a dollar there so easily that we never even notice the total adding up.
  5. Set financial goals and when the urge to spend hits, pull out those goals and ask yourself if the purchase will help or hinder those plans.
  6. PLAN!  Make up meal menus in advance.  Make lists when you go to the store (and stick to them like glue).  Use coupons for everything, even eating out or going to the movies.
  7. Admire your neighbor's new car/lawn tractor/swimming pool, then go home and rest easy because you are not drowning in debt.  Your neighbor is probably going to have to work a lot of hours, hours that you can be enjoying yourself, to pay off that new toy.
  8. Tell your kids that you agree with them.  They should be able to have what they want.  Then help them figure out a way to earn it.  That will weed out the feeble hearted and teach the kids a valuable lesson.
  9. Prepare meals ahead of time when you aren't tired or rushed and freeze them.  Use the crockpot.  Get the whole family to pitch in with meal prep.  Many hands make short of the work and you'll probably have fun, too.