‘Unhealthy’ Spending Habits and Why They Form

From overspending to buying unnecessary items on credit, many of us have at least one spending habit that most would deem ‘unhealthy’. But why do we do we do it to ourselves – and why do these habits form in the first instance?

In our latest article, we focus on the link between money and our mental health, amongst other things, and how you can break the cycle of overspending, spending money you don’t have (and any other habits you’ve succumbed to).

‘Money Habits Are Shaped by Our Experiences’

In an article for Red magazine, therapist Vicky Reynal suggests we all have unique ‘longings, fears and internal conflicts’, shaped by our experiences that express themselves via money.

Such longings, fears and internal conflicts can, states the piece, ‘have the power to influence our relationships, health, and financial futures’.

It’s such an important topic that Reynal has written a book: ‘Money on Your Mind: The Psychology Behind Your Financial Habits’, wherein she ‘examines some of our more extreme money behaviours’ continues the piece. These include ‘overspending’, which ‘speaks to a deep-seated desire to fit in’.

Elsewhere online, there are myriad views on what might lead to people adopting certain habits. and We’re about to look at five of said habits…

Spending Sprees

A spending spree can be as simple as a spot of well-deserved retail therapy. Or it can be a regular occurrence. Many of us have indulged in a one-off trip to the shops – a reward, for instance, for a task well done at work.

It’s important to note when spending sprees become a habit, though – and what might spark them in the first place. There’s plenty of advice in this Medium article, including how you can stop a spending spiral, and asking yourself how you were feeling when you felt the urge to spend.

Thinking logically before purchasing an item is great, but emotions are inevitable. That means you’ve got to have healthy emotional support methods on speed dial.’ states Emma Carey.

‘Minimise emotional spending by calling someone to comfort you when you’re sad or celebrate your success. Is no one available? Then journal how you feel.’

Burying Your Head in the Sand

Are you quite some way into your overdraft? Or maybe you’re prone to dipping into your hard-earned savings? If you’re burying your head in the sand about the state of your finances, though, by resisting to check your bank account, or change your ways, ask yourself why.

This is such a common behaviour that it has a name: ‘money avoidance’. Is it a habit of yours, too?

The Refinery site saysThere’s of course variation in what money avoidance specifically looks like for you. Maybe it’s avoiding being honest about your spending habits with a partner, driving more secrecy and stress. Or having trouble starting a budget or investing, keeping you stuck in a cycle of you kicking yourself for not doing so.’

Buying Things on Credit

Many of us may have spent more than we should have at some point or another. Perhaps we got a bit carried away post-payday and forgot to check our bank account for a few days. Or maybe you knew you were overspending and happily – or unhappily – entered your overdraft to buy a treat or two.

The Mind charity says people can overspend for all kinds of reasons, including to experience a ‘temporary high’ in order to ‘make yourself feel better’. Or as a result of an addiction or dependency which makes you spend money (such as those who are addicted to gambling).

Alternatively, you may spend more money than you have if you’re living with mania or hypomania.

If you’re keen to nip overspending in the bud, the Money Saving Expert site provides some tips. If, however, you think you’re suffering from manic or hypomanic symptoms, visit your GP for tailored support.

Impulse Buying

Ever bought something on impulse and later regretted it? Or perhaps you didn’t regret buying the item but, rather, you regretted the money you shelled out for it?

Psychology Today offers five reasons why we impulse buy and one of them is this: we’re wearing rose-tinted glasses.

‘For better and worse, we routinely delude ourselves.’ states the article’s author, Philip Graves – an expert in consumer behaviour. ‘We believe we’re better than average looking, better than average drivers, better than average parents…clearly, we can’t all be right.

‘Objectivity is an elusive virtue. Rather than look back and reflect on our past actions with anything approaching a balanced scorecard, we look to the future with an idealized view of what it might be like.’

Wasting Money on Seemingly Cheap Items

Overspending comes in all kinds of forms – and here’s one we’re probably all guilty of: thinking those smaller purchases don’t amount to much.

That takeaway coffee you get from the drive-through on the way to work. It may only be £3 per day, but over the working week, that’s £15. Buy one every day over the working month and you’re looking at least £60, just on hot drinks.

Ditto that Friday night takeaway, or those £5 lunch meal deals.

The easiest way to cut back on overspending in this capacity is to keep a diary of what you’re forking out – and when.

Are there any triggers that lead to overspending? Or perhaps you simply don’t leave yourself enough time in the morning to make a packed lunch or pour a coffee into a flask. Or maybe you simply feel like you ‘deserve’ a treat.

Assess why you spend what you spend, and you may be able to kick this particular habit to the kerb.

Money Vs Your Mental Health

It perhaps goes without saying that mental health can affect how you deal with money, with the Mind charity offering some ways your emotional wellbeing can impact your finances.

For example, states the charity: ‘if you’re feeling low or depressed, you might lack motivation to manage your finances’. Spending will give some people a brief high, while others ‘might overspend to feel better’.

Help and support is available via Mind, though, with advice on everything from managing gambling addiction to how to spot the signs of financial abuse – head here for more information.

Keen to create healthier financial habits? There’s a wealth of advice here on the ‘Knowledge Hub’ of our site. You can also check out our range of savings products for adults*

Until next time…

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