Disclaimer: The statements made in this post are the opinion of the author. They should not be viewed as financial advice. Please consult with a financial specialist before making any financial decisions.
This post may contain affiliate links, meaning I’ll receive commission at no extra cost to you for your purchase.*
I can be a real idiot with my money. And you know what, everyone is. There is no one that has lived a flawless money life. Not even Warren Buffet.
The mistakes we make depend on who we are and what weaknesses we have.
Your weakness might be an inability to invest to maximize your return.
Or your weakness might be spending a dollar here and a dollar there until you’re broke.
My weakness is the traveling salesman.
I Didn’t Want Meat That Bad Until….
Here’s a recent example of how I’ve screwed up my finances because of traveling salesman.
I was out on a date with my wife and we heard an ad on the radio advertising discount meats “on sale this weekend only”, blah blah blah. You know the drill.
We decided that we liked the idea of discount meat, so we stopped by.
I was not ready for the sales pitch that came next.
They hit us with all the known tactics. Cutting the price in half while doubling the amount of goods. Throwing in a freebie. And giving that all important time crunch.
My head started swirling with the lack of thinking time so my emotional instincts kicked in. I rationalized that the price was so good because they had brought it down so much. I mean we need to buy meat anyway, right?
Then I turned to my wife and we both asked, “Do you want to do it?”.
With that lack of commitment one way or the other, we caved to the pressure.
We were now the owners of boxes of meat, some types that we had never bought in five years of marriage, and our freezer was packed.
Meating the Consequences
I know, it’s a terrible pun. Let’s just move on.
Once we got home I started to run the cold hard math and was hit by a one two punch.
One, we spent way more for that meat per pound than we usually spend on meat.
Two, because I hadn’t updated my total spending for a bit, I was unaware that we were now over budget. YIKES!
I felt terrible about it, but I didn’t think the parking lot meat salesman had a return policy, especially after I had dumped the meat out of the boxes and into my freezer.
Pro tip: Don’t buy a lot of meat without a deep freezer. YOU DON’T HAVE THE SPACE.
What Went Wrong
After looking back on what happened, I want to offer a few observations of what I did wrong.
First: I let my emotions into the driver’s seat without any brakes.
Emotions are a very important part of how we see the world. We’d be entirely devoid of interest in this world without emotions.
But, emotions are not what we want to pilot something so rational and logical as money. Especially where our budgets are concerned.
To avoid this, try to find a break pedal for your money car whenever your emotions start to take control.
For me, I just need to ask a salesman for some time to think and then ask myself, “Do I really need this?”
If I could have simply asked if I needed that much meat the answer would have been a firm no.
Other brakes could include actual stop software on your investments that won’t let you sell your whole portfolio immediately. Or not carrying cash on you to avoid those small primal purchases you make every day (like the vending machine).
Second: I neglected my spending tracker.
If you’ve been reading my blog you know I like to recommend that you track your spending. The reason I recommend this is because of what I’ve just described. Overspending can creep up on you. It crept up on me!
To clarify, I was inputting numbers into my spending tracker. I had all of the data I needed to make an informed decision, but I hadn’t turned those numbers into useable amounts.
The way my system works is I write down everything I spend, then total those purchases in each category at the end of the week. This gives me a snapshot of where I am and how I am doing on my spending.
I had not totaled my purchases for a couple of weeks, so while I had a vague idea of how much money I had available, I didn’t have exact figures in my head.
Then in the course of a week I was hit with a large DMV fee and buying a new car battery as well as a home improvement project after a rodent found its way into our walls….don’t ask.
The point is that I wasn’t being careful tracking these expenses and I paid the consequences (literally).
So whatever your system is, make sure that you stay consistent to avoid being caught off guard by overspending.
Third: Our indecision became a decision.
There is an old saying that not deciding is a decision of itself. That certainly happened to us.
Neither of us really wanted the beef we bought, but neither of us didn’t want it either. We both looked at each other and shrugged. Under the continued pressure we just caved and said we’ll buy it.
What I’m trying to say is if you don’t have a purpose for your purchase, then don’t buy it.
You’ll regret it later.
How To Avoid Making Bad Purchases
There are a few tricks to avoid making a bad purchase. They don’t always work, but they can help.
First: Slow Your Thinking
Spending money is a very emotional activity based on a very logical set of rules. In other words, we spend money because of how it makes us feel, but how we feel has nothing to do with how much money we have to spend.
So to avoid this kind of emotional response, we need to slow our thinking down to the logical level.
For example, place a note in your wallet or on your credit card to remind you to slow down before you make a purchase. If you can take that note seriously every time you buy then you will get ahead much faster.
Some people literally freeze their credit card to do this. You have to wait for the ice to melt before making a purchase, which gives you time to mull it over. I wouldn’t do that, but you might.
Do whatever works for you.
If you’re interested in the idea of slowing your thinking, check out Thinking Fast and Slow by Daniel Kahneman*.
Second: Fight Emotion with Emotion
When you’re in a pressure situation to make a purchase, it is important to remember what really matters to you.
My wife and I made a list of things that really matter to us that we want to purchase. That’s the emotional piece.
When it comes time to buy we can look at our list and decide if we want a bunch of meat more than a new brush cutter or an essential oil kit. (I’ll let you decide who wants what).
Of course, we forgot to look at the list, but it is a helpful tool for pitting emotion against emotion.
Third: Avoid Your Spending Weaknesses
I know that I am a sucker for a salesman. So I try to avoid salesmen. I’m not perfect at it as the meat purchase shows, but if I know it is a sales pitch I try not to listen.
What is your spending weakness? It might take some moments of introspection to figure it out. When you do, put systems in place to avoid those triggers.
If you can avoid your spending weakness twice as well as you are now, won’t that have an impact on your spending?
What if you can double that again? Even better!
You’ll never be perfect at it, but every time you do fall into your spending weakness trap, just dust yourself off and start again. Eventually, you will triumph.
What is a time you’ve spent money and regretted it? How have you avoided your spending weakness? Tell me about it in the comments below.
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