The pain of overspending money is real. The pain is most acute the minute the bills arrive. Many people believe the only pain is when money leaves their bank account to pay the creditors.
That is not the only pain. Research shows people experience actual pain when they overspend money. Ironically this pain is not experienced only when payment is due on credit card bills.
Research also shows the pain of overspending money is also experienced when debit cards and cash is used to pay for goods and services. Let’s look at why this pain exists and how to avoid it whenever possible.
I am not referring to saving money but being happier and living more with less spending.
The pain of overspending money and spending habits
There are cultural spending habits and spending habits that are an accumulation of rules people establish during life. Most people are wired to spend the least possible on goods and services.
For example, I like to spend mid-level prices on items.
When the store employee looks into the computer to match new tires or a new battery for my car I always select the mid-level price. Not the least expensive and not the most expensive.
I don’t know why. It just became a rule of mine.
Most people have a host of similar rules when It comes to spending money. Some people never buy high-end items while others prefer to buy high-end items.
No matter the spending rules people choose to live by they still manage to experience the pain of overspending money from time to time.
It usually comes from breaking one or more of your spending rules or spending too much just because it feels so good.
The pain of overspending money and understanding what happens in your brain
Spending money to acquire the things we like actually triggers the release of the feel-good hormone called dopamine. What is dopamine?
“Dopamine is a neurotransmitter that helps control the brain‘s reward and pleasure centers. Dopamine also helps regulate movement and emotional responses, and it enables us not only to see rewards, but to take action to move toward them”
This is the same chemical that is released into the body when we enjoy our favorite foods and when we are with our favorite person. We are talking about experiencing powerful pleasurable emotions.
This is one of the reasons why people overspend money ignoring the likelihood they may suffer the pain of overspending money at a later time. It just becomes so darn pleasurable you buy the items anyway.
The pain of overspending money and the tricks of the trade
We all know overspending money can often bring us pain at a later time. Why do we still overspend? We just discussed the chemical reaction that happens in our body that brings pleasure when we spend money but there are external forces at work too.
The use of credit cards and the joy of delayed payment play an important role when we decide to overspend. Buy now and pay later. When I say pay, I mean pay. LOL.
Many people tend to use debit cards to combat this buy now pay later trap with little success.
Debit cards don’t extend credit and they deduct payment from available funds in your bank accounts. They still carry the credit card logos and people still use them the same way.
Did you know you can still experience the pain of overspending even when you have a whole lot of money in the bank to cover the cost? Research shows that people spend more when using credit and debit cards alike.
“That’s got to be crazy, right? It suggests that the psychological cost of spending a dollar on a credit card is only fifty cents.” – Prelec
To the user debit and credit card, spending can be distorted. They psychologically believe they are spending about half of what they are actually spending. One dollar of debit and credit card spending feels like fifty cents to many people.
Retailers are aware of these facts and deploy tactics to exploit them to get people to spend more money. Retailers are aware the pain of overspending money is delayed when using debit and credit cards.
They bait customers with fake discounts and easy ways to bundle purchases.
The pain of overspending money is not entirely our fault. There are brilliant minds and billions of dollars spent to find ways to ensure we feel the pain.
The pain of overspending money and how to avoid it
We have come to realize the human anatomy betrays us and rewards us with pleasurable feelings when we buy things we like. There is never a shortage of entities at the ready to ensure we feel the pain of overspending money by enticing us to do so.
Here are a few tips to help you keep more of your money in your pocket and avoid the pain of overspending money.
- Find other ways to get your dopamine fix. Shopping and spending money should not be done for fun and entertainment, try to avoid it. I know the malls and the stores are made to be fun places but don’t fall into that trap.
- If you must shop for pl3asure or entertainment use cash. The use of cash will center you to the world of reality. The pain of overspending money is immediate and hopefully, you will avoid it.
- Track your debit and credit card spending. You knew this was coming. LOL. Keep and small notepad with, use the software, or an app to quickly track your spending to avoid the pain of overspending money.
The more money you save on not buy stuff for entertainment you can spend with good friends and family doing what you love to do.
Set aside a little “fun money”
Treating yourself to items or going on a shopping spree is not all bad. Sometimes you deserve it. As a minimalist, I have rules about that. We will not get into my rules for now but hope you take steps to avoid the pain of overspending money.
Set some fun money aside every week to pay for those occasional shopping sprees or entertainment spending. You can do it with a little effort. Even if it is just a few bucks a month. When we have fun money readily available it makes spending more fun.
When something comes up or you are invited out you can participate and really enjoy yourself. You can indulge in guilt-free spontaneity and avoid the pain of overspending money.