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Why Do We Continue To Spend?

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By Jean Chatzky

The Tampa Tribune

Published: June 29, 2008

Cutting back. It's what we've been hearing about over the last few months. Airline companies and the financial industry are doing it. But are you?

Chances are you've made a few changes to your budget to accommodate the high gas prices. Maybe you've cut back to one coffee drink a day instead of two or limited takeout to once a week. And while that's certainly a step in the right direction, it's likely not enough.

The fact is, despite the state of our economy, we're still heading to the stores. Retail sales for May were largely better than expected - good for the economy, good for the stock market, but bad for your wallet, particularly if you've been floating your purchases on a credit card.

So why do we keep spending when we know we can't afford it? For one, it's easy.

"There is limitless choice out there, and even stuck at your desk at work, you can now shop because you have the Internet right in front of you," says Rob Walker, a former colleague of mine and author of "Buying In: The Secret Dialogue Between What We Buy and Who We Are."

But shopping also makes us feel good. The moment of acquisition, and everything leading up to it, is very exciting. After that, though, things usually go downhill. You use it once or twice, and it becomes old news, just like everything else you've stuffed in your closet or basement over the years.

Here's how to stop - or at the least, slow - the cycle.

Don't cut; cut back. Shopping is habit-forming, and after a while, picking up a few new things each week becomes a given, rather than a luxury. You feel entitled to spend, rationalizing it by telling yourself that you've had a long day and you need a new DVD or your wardrobe just won't cut it for the event you have coming up.

"Set limitations for yourself. Shopping can be a treat on a special occasion, but if you do it every day, it loses its meaning," says Mary Carlomagno, founder of Order, a company that specializes in clutter control and shopping addictions.

Think. Most of us walk through life spending money on things we know we want, but we don't ever take time to understand why.

"What I've been doing is walking around the store with whatever it is I'm thinking about buying. I like to use that time to either talk myself into it or out of it. You have to distinguish between shopping and buying because you don't need to buy on every shopping trip," Carlomagno says.

Stick to the classics. I know - we all want to be trendy. I'll cop to bringing home the latest handbag or coat and then tossing it in the back of my closet less than a year later. We've all done it. But unless you're Paris Hilton, chasing every season's hottest trend will land you in a boatload of debt within a year.

Don't be a marketing victim. Remember the Livestrong wristbands? They were launched a few years ago by the Lance Armstrong Foundation to raise money for cancer. There was a limited quantity available, and it got to a point where people were buying the $1 bracelet on eBay for $10, with none of their money going to the cause. The fact is, marketers know how to get in our heads. We want what we can't have.

"It's something you can talk about, a conversation piece, and you're hoping that someone will notice. It's pretty easy to get caught up in that," Walker says.

Treat yourself. If you were a serious shopper, you're going to have to fill that void with something else in order to stay on track.

Just because you and your credit card can't hit the mall doesn't mean you can't reward yourself in other ways. Give yourself a pedicure, spend some time in the gym or join some friends for a bowling game.

There are countless cheap or even free things to fill your time, particularly now that it's summer, and the weather is prime for barbecues and trips to the pool.

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