How avoid that sinking (bank account) feeling
“Red Monday Remorse” typically follows the Black Friday spending binge. It’s the day you realize you’ve changed the colour of your budget from black to red. The same thing happens in the weeks leading up to Christmas. And the problem is that absolutely no one forces you to do this. You do it to yourself. But there are plenty of outside pressures helping you dig that hole. What it boils down to is that extravagant spending is a financial-behavioural issue. Very few of us are immune. But there are some simple, tried-and-true ways to get it under control.
Ad apocalypse. It’s everywhere, all the time, 24/7. That incessant, demanding advertising noise. You even carry it around in your hand, with social media apps especially inundated with ads. All designed to elicit an emotional response, including the fear of missing out (FOMO), in order to get you to “Act Now!” and send somebody your money. It’s insidious and it’s cumulative, and all carefully designed to break down your barriers and change your financial behaviour.
But you can resist. First and foremost use as many ad-blocker functions as you can on your browsers and apps. Never sign up for social media feeds, messages, newsletters, or advisories that are in fact carefully camouflaged advertising. Even for non-ad-based material, always check the “no” box for offers to send your data to third party suppliers of any kind. Unsubscribe from bothersome emails you may have allowed long ago. Disallow data collection cookies on websites you visit.
Avoid impulse purchases. Most retail websites are cunningly designed to rope you into impulse spending by asking you to store your credit card data and sign up for “one click” ordering. That makes it way too easy to see something at a “deep discount” price and simply hit the purchase button to order it. In fact, if you use this regularly, you’re likely just one click away from the poorhouse. If you’re seized with a sudden desire for some shiny new thing, set yourself a limit. If it’s more than, say, $100-$200, put it on hold for a week. Chances are your ardor for that thing will have cooled, and you’ll have saved yourself a couple of hundred dollars.
Avoid credit card debt. Severely limit the use of credit cards, especially during peak periods like Black Friday and Christmas. Use a debit card if you can. If you must use a credit card (online, for instance), or simply have to push your payment back for a month, use only one low-limit card. Leave the others at home when you go shopping. Then pay off the balance completely every month.
Tune out social media pressures. Fear Of Missing Out and Keeping Up With the Joneses are perennial hot-buttons advertisers use to persuade you to buy more than you need or something you don’t really want. It’s the ultimate in financial behavioural engineering brought to you courtesy of Instagram, Facebook, Twitter, WhatsApp, and all the other social media channels.
When you see all those rich, beautiful people in ads cavorting on a deserted beach or driving those expensive shiny cars in the mountains, accompanied by compelling music and hypnotic voice-overs, remember that you are being played. Advertisers have always tried to sell you a dream or a fantasy first. And the more highly-priced the object they’re trying to sell, the more lurid the fantasy is. Recognize and acknowledge the psychological tricks of manipulation and persuasion used by advertisers, and tune them out.
Use a budget to fight the spending war. Think of the holiday shopping season as a war. Retailers do everything in their power to separate you from your money, with powerful inducements like Black Friday at their disposal. You have to put up a stout defence. And your best defensive tool is the budget process.
The budget helps you set goals and establish benchmarks. It’s what retailers do. Why can’t you do the same? For example, establish a fixed dollar limit for your holiday spending right at the outset. Do it per person, per family, per couple, any which way you like. But do not exceed it! It’s a psychological trick that forces you to plan your shopping, rather than joining the maddened crowds in the malls and spending on impulse.
Use these tips to set limits on your holiday spending, and you’ll very quickly put an end to Red Monday Remorse.