Why do we buy things we don’t need?
There are plenty of reasons we spend our cash on things that we could probably do without. We often feel coaxed into spending through advertising campaigns, peer pressure and our own personal reasons too. Spending our money like this can make us feel frivolous, guilty and irresponsible. So, why do we do it?
Uncover the causes and triggers for our spending. GMB Credit Union can help you manage your money, outsmart overspends and still treat yourself and your family without the guilt.
The triggers behind our spending
Emotion
It’s called ‘retail therapy’ for a reason. Many of us look to new purchases to cheer us up when we’re feeling down, stressed or anxious. If you ever feel this way, rest assured, you’re not on your own. Research collated by The i Paper shows that 66% of British consumers overspend to make themselves feel better and 46% of us feel “guilty after purchasing but continue to splurge on impulsive mood-boost buys.”
Boredom
Sometimes we look to spend money to entertain or occupy ourselves. And it’s easy. Online shopping makes it possible for us to buy what we want, when we want, without having to move from the couch. With the promise of simple and free returns, this kind of spending doesn’t feel as risky.
Remember lockdown? According to The Office for National Statistics, our online spending rose from £1.5 billion to £2.5 billion per week during lockdown, a rise of 62%. An inability to leave the house and an excess of spare time caused us all to spend more money.
Pressure
Feel like you need to keep up? Particularly with younger people, the fear of missing out (FOMO) causes 25% of us to overspend, according to FA Magazine. This could be a case of peer pressure, feeling compelled to match their friends’ spending or lifestyle choices. wanting to have the same products or match our lifestyle with our social circle. It could easily be external pressure, like a susceptibility to advertising. Businesses spend millions of pounds on ad campaigns and releasing newer versions of the same products. It makes us feel like we must buy the latest model or update, lest we get left behind.
Reasons like these would have us feel like a new purchase will make us feel better or happier because we’re treating or rewarding ourselves. In fact, we’re often left regretting spending money we shouldn’t have, particularly if we know money is tight and we’re looking to save. It’s perilously easy to get into a vicious cycle of spending to feel better, feeling bad about it, then spending more to cheer ourselves up again.
Buy now, pay later (BNPL) culture
Planning a family holiday is exciting for everyone. Planning the finances for it, however: not as fun. But it As if things needed to be made any easier. Buy now, pay later (BNPL) schemes mean we can get hold of the things we want, even some of the most expensive splurges, without having to front the money straight away. Credit card spending is increasingly being replaced by BNPL services such as Klarna. They allow interest free ‘flexible’ spending.
Research from Adobe for Business shows that over £1 in every £7 spent online in the UK is spent using a BNPL service. There are certainly some advantages. Klarna indicate that they have saved users over half a billion pounds since 2014. However, it can be argued that these services draw you in to spend more than you can afford to repay, landing you in hot water without care and attention. If your financial situation isn’t stable, your credit is poor or you might struggle with repayments, BNPL is not an advisable route to take.
Outsmart impulsive spending
It might feel like you’re being trapped into purchasing things you can’t necessarily afford. The good news is, there are lots of techniques you can use to curb the splurge and make sure you’re staying in control.
Setting budgets
If you’re looking to buy something for yourself or the family as a treat then make sure you have the money for it first. Setting a budget for an item, holiday or experience will give you confidence that the cost won’t spiral out of control. You can look for the things that are in your price range and not get drawn into overspends.
Taking time out
An excellent way to manage impulsive spending is to simply take the impulse out of it! If you find yourself shopping online, filling your basket with things you think you’d like, take some time out before you hit the checkout button. Leaving 24 hours before hitting ‘pay now’ gives you the opportunity to reflect on the purchase and decide if you really want, need or can afford it.
A little help from your friends
It may feel like you must keep up with your friend’s spending, but they can be allies rather than opponents. By sharing your concerns or financial situations with friends and family, it helps to create a sense of accountability as well as a financial support network.
Shift your thinking from trying to keep up with your friends spending to trying to keep up with their saving. Everyone loves a bargain. If you change the mentality so that spending less gives you more of a kick than spending more, you can become a saving show-off.
Get some support from us
We’ve got lots of tools that help and support our members in managing their spending.
- Budget planner. This comprehensive tool helps you easily see your income, expenditure and savings. It creates a budget quickly and easily for you, including budgeting for non-essential spending, travel and leisure.
- Educational resources. Our website has a host of free guides and advice, including our Member Helper page, full of financial resources, like our Money Navigator, Debt Advice Locator and Budget Planner. Feel more in control of your money by learning how to manage it better.
- Savings account. By becoming a GMBCU member, you’ll be able to open one of our five different savings accounts, each providing specific benefits to suit whatever financial goals you have at any time of your life.
At GMBCU, we believe our members deserve to feel confident and in control of their money. We’re here to help our members by providing affordable loans and easy-access savings accounts, so that everyone in the GMBCU community benefits.
By working with you, we help you find most responsible solutions for saving and borrowing. Feel more confident with your money. Make better financial decisions and avoid the spending traps with ease.