Shopaholics Unite: 3 Ways to Curb Holiday Over-Spending

| Posted Nov 13th 2009 6:00PM by Erin Loechner

Filed under: Gifts + Shopping

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Are you a shopaholic? Photo: AMagill, Flickr

After reading the disheartening (yet oh so informative) article 7 Signs You're a Shopaholic, I immediately took a good look in the mirror (and at my bank account). In his book Shoptimism, author Lee Eisenberg suggests the seven deadly warning signs of compulsive shoppers, and although I don't quite fit the bill for the first six, the last one rings true for me in almost every circumstance:

1. You buy things even though you can't afford them.
2. You believe others would be horrified if they found out about your spending habits.
3. You write checks even though you know there's not enough in the bank to cover them.
4. If you have any money left at the end of a pay period, you feel compelled to spend it.
5. You make only the minimum payments on your credit-card statements (if you make any at all).
6. You feel anxious or nervous on days you don't go shopping.
7. You buy things to make yourself feel better.

Bingo. Guilty as charged. Had a fight with the husband? Buy a latte. Rough day at work? Splurge on a new bath soak. Overwhelmed with responsibility? Treat myself to a pedicure. The list goes on... and on and on. So what's the solution? Holidash enlisted the help of Matt Wallaert, behavioral consumer psychologist and Science Advisor to LendingTree, to help stop the cycle of impulse purchases:

Wallaert notes, "It is a cycle. You buy, you feel good, it wears off and you feel bad, so you have to buy more to feel good again. Insert the word 'use drugs' in there and it starts to sound awfully familiar. That's because shopping behavior can operate much like an addiction, in that we get 'addicted' to the goodness we feel when we buy that special something or find that awesome sale."

And in today's economy, we can all use a bit of feel-good, right? But the economy may be one reason we're shopping. Wallaert says that a lack of control is often a prime symptom of compulsive shoppers: "It is hard to feel in-control these days, with the economy so bad and so many chances to feel like there are critical life decisions that you're getting wrong. One of the things about purchasing is that it is a perfect, if short-term, expression of control: You make a choice, you decide, you pay, you have it right in your hands. Decision made, transaction done, control exercised. Shopping isn't a gamble -- the good feeling is immediate and reliable. It is the aftermath that is so problematic."

So how do we combat the drug that is overspending? Wallaert shares his three super useful tips with Holidash:

1. Plan Ahead
One of the keys to avoiding compulsive buying is making a plan that controls how you spend your money and forces you to make trade-offs when you deviate from that plan, rather viewing money as an ever-expanding pool (or a bottomless pit). I recommend action-based budgeting -- that is, after you do the standard budgeting procedure of figuring out how much you can spend (take how much you earn, set aside what you need for rent and other important required expenses, a portion for saving, and then designate the rest for optional spending), translate those breakdowns into actions. First, track your spending for a month and figure out how much a particular behavior costs: A restaurant, for example, might be an average $30 bill. So if your budget for restaurant eating is $100, you can go out to eat 3 times. Count them down as you use them up throughout the month: I've even helped people use a calendar with stickers to keep track. Or use an online tool like Moneyright, which both creates a budget and computes your actions automatically.

2. Monitor Your Money
If you are using a budget and actions, you only have those to pay attention to, but if you don't want or are unwilling to budget, at least use something to monitor your spending. Make a commitment to check your bank account daily or weekly, and to understand where every dollar goes. The mere act of looking at what you've spent tends to slow your spending progression, as it makes you think twice about spending when you know you'll have to confront it later.

3. Change Your Environment
This one is huge. Want to avoid overspending? Don't put yourself in places you can spend. So for example, Black Friday is a huge temptation for a lot of overspenders. So make plans that you can't get out of, like cooking with friends or participating in a Thanksgiving-related event, so that you simply can't go to the store, no matter how good the sale. Keep yourself away from the Internet, too -- the harder you make it shop, the less you will.

One last trick from Wallaert: "If you do have something you want to buy, you can do things to make sure you buy that and only that. You can leave your credit card in the car, go shopping, then force yourself to walk to the car to get payment...you may be surprised what you don't want when you've had five minutes to think about it. If you know exactly what item you want and its sale price, you can write a check for that exact amount or carry only the amount of cash needed to pay for that item and nothing else," notes Wallaert.

I can't wait to take Wallaert's advice to heart (and wallet). This year, I plan to find things that make myself feel better -- minus the price tag -- such as caroling, crafting and cooking. With a few changes and a lot of tips, I'll be walking (and not spending!) in a winter wonderland all season long.
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