Are You a Spending Addict?

I have been reading a lot about food addiction lately, and of course, there are many parallels between over-eating and over-spending.  [See my previous posts on why saving is like dieting and why does spending make us feel good] Clearly, with so many people intending to lose weight and not being able to maintain it, there’s something more going on.  Only recently are researchers looking at the impact on the brain of food addiction, and also at the various additives that call your name and test your willpower. There seem to be many similarities with spending addictions. One is that, unlike say smoking, you can’t go cold turkey and not eat or not spend.  And two, there are powers that are conspiring to encourage you to spend such as catalogues with the coolest gadgets, credit card offers, and things like sales so that you can make yourself feel like your getting a good deal.  Here are some suggestions to lower the temptation to over-spend:

–Try to pinpoint the source of your problems — if it is a binge cascade or when you are in a particular situation, see if those circumstances can be avoided.

–Clear your environment of temptations — this means canceling the catalogs that you tend to give in to, putting your credit cards in the freezer and stopping yourself from perusing websites with expensive items that you covet.  It’s easier to ignore impulses if you eliminate the initial stimuli.

–Try to distract yourself – many people overeat and overspend out of boredom.  If this is the case, try to cultivate alternative activities that do not involve food or money.  I like to go for a walk which is good for lowering cortisol levels.

–Implement the 24 hour rule for big purchases – many people give in to the impulse to spend, only later to find later they really didn’t want the item.  Have a rule that any significant purchases have to pass the 24-hour test where you don’t buy on impulse.

–Try a monthly fun money allowance to prevent sending binges – many people find these allowances useful to curb spending urges.

shared at this week’s Carnival of Personal Finance