Does your bank account balance got you feeling down?
Wondering how your credit card bill got so high?
Wishing you knew a way to say “No” to yourself, when it comes to spending money?
Saving money is not always an easy task, especially if you are used to spending whenever you feel like it, on whatever you want. It will take time to change your spending habits, but it is worth it in the end.
Many of us end up over budget, and maxed out at the end of the month, and are not sure how that happened.
Sure some costs may be a result of an emergency cost, such as a car problem or medical bill, but much of the debt comes from those little everyday costs or impulse buys, that we rationalize ourselves into thinking are no big deal.
Well, those no big deal purchases do add up, resulting in over spending and misjudging the amount of money we had to spend.
What does rationalizing a purchase mean?
Rationalizing a purchase is the act of finding a reason to validate a purchase in your favour.
This is usually to avoid the feelings of guilt for over spending or buying an item that is not needed.
Rationalizing takes thinking through a purchase (which is a good thing to do), but spinning the thought process to lean in your favour. Essentially coming up with a reason (sometimes a lie) as to why you need that item.
Why do we do this?
Why do we rationalize a purchase? There are a few reasons we end up doing this.
By rationalizing your purchases you are:
- Avoiding changing your spending habits
- Instant gratification
- Indulging
- Not keeping track of those little/ justified purchases
- Avoid guilt
- Emotional spending (retail therapy)
What Rationalizing Looks Like
Talking yourself into a purchase that you know you do not need is similar to breaking a diet.
You reason with yourself that you earned that cookie, or it’s a healthy version of a cookie. Either way should probably not be having that cookie.
You justify your decision in a way to avoid guilt while still getting joy out of the purchase.
The following are common ways people rationalize those purchases.
Great Sale
“It is on sale.”
You are not saving money when you are still paying for the item, especially if you did not need it. You would of SAVED the money if you did not spend the money.
Retailers know how we think, and know how to manipulate us into spending our hard earned dollars.
Big sale signs reading out “LAST CHANCE”, “CLEARANCE”, “BOGO”
Remember to check if it really is a deal, check unit prices (bulk items), will you use the whole thing (sets, like tools or outfits).
Do this instead:
- Think about what items you already have that could be used.
- Can you thrift this instead?
- Can you borrow or make this?
- Where could I use this money instead?
Special Occasions
“You only get married once”
“It’s a big birthday”
“But it’s Christmas!”
How many times have you used this one to justify a purchase, and then later look at your credit card statement, and wondered what the heck happened?
This has happened to me a few times around the holidays, I get carried away and want to spoil everyone.
Do this instead:
- Set a realistic budget and stick to it.
- Shop sales throughout the year.
But I NEED This
It is definitely important to know the difference between a want and a need when it comes to spending wisely, however it can be easy to convince your brain to make a purchase based on a need.
The whole want vs. need comparison can backfire when it is an item you do need, but you over spend as a result.
An example of this is you need new dress shoes for a friend’s wedding.
However you want the pair that is out of your budget. You justify the purchase as you need the shoes.
Do this instead:
- Shop around for a better price, or find a similar pair at a lower cost.
- Think about how many times you will actually wear the shoes.
- Could you borrow a similar shoe from friends or a family member?
Only a Few Dollars
“It is only a few dollars.”
Spending a few dollars here and there will feel like no big deal. But when added up by the end of the month or year it can total up to more than you thought.
Take the classic coffee example into consideration.
“Only $2” x 5 days = $10 a week
$10 x 52 weeks in a year
= $520 a year!
Now that’s just coffee, imagine all the other “only a few dollars” purchases you make throughout the year, it all adds up.
Do this instead:
- Instead of constantly buying food/ coffee outside the home, make it instead.
- Limit the days you buy out
- Keep track of all purchases, even the “few dollar ones”
- Work the smaller purchases into your budget
It’s an Investment
“It is an item of quality”
“I’ll use it for years”
While it is good to invest in quality items that you can use year after year, make sure the item will indeed add value to your life in the long run. It is also important to be realistic and honest with yourself.
Think the latest and greatest technology, can an older model do the same for a better price?
Do this instead:
- Rent/ borrow
- Buy used
- Buy an older model
- Do you really need it or could you use something you already have?
- How did you survive without, could you still?
- Budget accordingly and buy at the right time after some thought
Related Reading:
10 Things I Stopped Buying To Save Money
10 Bad Money Habits That Are Keeping You Broke
Stop Buying These 11 Things To Save Money
Ways to Combat Rationalizing Purchases
The following are ways to help you avoid talking yourself into impulsive purchases. And instead help talk you out of those things you really don’t need.
Remember Your “Why”
This is one of my favourite frugal habits, and it helps me stay on track.
I think to myself, “Should I spend the money on this purchase, or should I put it towards one of my savings goals?”. Currently I am saving for my wedding, which I know will come with a hefty bill, so any extra money needs to be heading that way.
Common Financial Goals:
- Becoming debt-free
- Saving for a house/ repairs
- Student loans
- Family Planning
- Car
- Travel
Keep a goal list of your “Why” visible, in your wallet, on your lock screen of your phone, anywhere that will remind you what you are saving for, and deter you from spending frivolously.
Stop and Think
Consider the cost to your financial goals, your future. Is this short-term gratification worth it in the long run?
Ask yourself these Questions:
- Where could I use this money instead?
- Why am I buying this (is it an emotional purchase?)
- Do I even need it?
- Do I have something similar?
- Can I borrow it?
- Can I make it?
- Can I repurpose something I already have?
- Is it worth it?
- Will it last?
- Where will it go?
Asking yourself just a few of these questions will force you to slow down and think about the purchase thoroughly. After all that if it seems worthy then by all means buy it, if you can afford it.
Budget For It
Add it to your budget, simple as that.
Save up for the item. That will give you time to think through the purchase, look for a deal, and you still get to treat yourself.
Make cuts in other areas to make room for something you want.
Want to go out for dinner, go out once a month and make the rest of your meals at home.
Challenge Yourself to a Spending Freeze
A spending freeze is a great way to challenge yourself to not spend anything for a set period of time. This will cut back on you have to rationalize all those purchases, because you wont be making any!
A spending freeze can help break you out of the habit of spending money, especially on those daily micro charges.
Pick a time frame, and choose not to spend money during that time. You can adjust it your family’s need, and make it fun!
Want to learn more about spending freezes? The Ultimate How To Guide On Spending Freezes
We all rationalize certain purchases we make, but by being more aware, and taking steps to reduce this habit, will decrease your overspending and increase your intentional spending.
Do you find yourself rationalizing your spending? On what?
Let me know in the comments down below.
