Author Icon

Stop Lying, 5 Ways to Stop Overspending

Man crossing his fingers and lieingFor my day job, I work at an aerospace firm. In order to receive all of my vacation time, I am required by my employer to continue educating myself through books, classes, seminars, training, etc. As a book lover, I generally fulfill this requirement through reading. Currently, I’m reading “All Marketers are Liars” by Seth Godin.

One of the main themes of the book is – you’re a liar. Don’t worry though, so am I. In fact, most people are liars. Satisfying some psychological need, we tell ourselves “stories” or lies about why a certain product or service will fulfill some deep rooted need. Unfortunately, we are generally meeting just a deep rooted want. For example, here’s a few excerpts from the book.

“Does it really matter that the $80,000 Porsche Cayenne and the $36,000 VW Touareg are virtually the same vehicle, made in the same factory? Or that your new laptop is not measurably faster in actual use than the one it replaced…Marketers profit because consumers buy what they want, not what they need. Needs are practical and objective, wants are irrational and subjective…

“Marketers aren’t liars. They are just storytellers. It’s the consumers who are liars. As consumers, we lie to ourselves every day. We lie to ourselves about what we wear, where we live, how we vote and what we do at work…This is a book about the psychology of satisfaction. I believe that people tell themselves stories and then work hard to make them true. I call a story that a consumer believes a lie.”

This habit of lying to ourselves threatens are financial stability. Instead of spending $5, we spend $20. Instead of recognizing that we want that new shirt, car, or fine dinner at a restaurant, we lie to ourselves until we are convinced that, for one reason or another, we need that new shirt, car, or fine dinner. The current credit crunch can partly be blamed on a nation full of liars who convinced themselves that a $500,000 home was necessary even though a $250,000 home was sufficient. We must learn to live within our income and that means, we must stop lying!

I’ve compiled a short list of ideas on how to stop lying to ourselves and face the truth when making purchase decisions.

  1. Have and stick to a budget. Is this purchase in my budget? For example, my wife and I budget a certain amount each month to spend on clothing. We’ve both agreed that this amount is sufficient to meet our needs. We have set this amount before facing a purchase decision. If during the month we want to exceed the budget because Kohl’s is having a fantastic sale, then we are now lying to ourselves. We aren’t saving money by exceeding our budget during a sale. In fact, now I have to dip into savings to pay for my overspending.
  2. Set a per purchase spending limit. A wise man said, “The four most caring words for those we love are ‘We can’t afford it.’” Take some time with your spouse to set what I call “What I can spend without having to ask my wife if it’s ok” spending limit. My wife and I have decided that neither one of us is allowed to spend more than $50 at any given time without calling and asking the other one if it’s okay (this does not apply to groceries). Let me tell you right now, my wife has stopped me from making a lot of unnecessary purchases by telling me, “We can’t afford it.” Even though we had a budget for the purchase, we still didn’t need it.
  3. Replace bad habits with enjoyable, inexpensive activities. Shopping or overspending is a habit that we have likely formed over years. Since our brains are programmed to react in a certain way in specific situations, any change is met by resistance. The existing habit is simply more comfortable and natural. To help change your behavior, replace the bad habit with another activity. For example, instead of going to the mall to pass time, go to a local park with a soccer ball and spend some time with family or friends. Start or re-start a hobby. Your new hobby might even be a low cost home business where you make money! (For more ideas of this nature, visit The Digerati Life)
  4. Make sure that the reason you tell yourself you are making the purchase and the reason you are making the purchase are the same. Ask yourself, “Why am I really making this purchase?” Am I buying this dress for my wife because I love her and want to show my appreciation, or am I trying to prove to her and the world that I am a good provider? We lie to ourselves to cover our true motives. If the real reason you are making a purchase isn’t in-line with your principles and budget, then don’t buy it.
  5. Take stock of and enjoy everything that you already have. Develop gratitude for what you already have in your life. Purchasing new things is often a sign of ingratitude for what life has already afforded us or a sign that we feel deficient in some area.

Overcoming bad habits and addictions is a process that requires concerted effort. Face each day one at a time and stop lying to yourself! Don’t believe the story you’ve created in your mind that justifies unnecessary and financially harmful purchases.

(Also, I wrote a little while ago about two other principles that help put money into the right perspective)

This post was featured in the Carnival of Personal Finance #217 hosted by Almost Frugal.

Related Posts with Thumbnails


Tags: , , | Filed under Cash Management, Featured


  • Pingback: Carnival of Personal Finance #217: The French Money Quotes Edition - Almost Frugal- a frugal blog

  • http://www.americanbankingnews.com/ American Banking News

    One thing I’d recommend about budgeting is starting with a big ‘miscellaneous’ category and slowly decrease it as you start figuring out what you actually spend your money on.

    • http://www.rabbitfunds.com/ Adam

      Thanks for the comment. My wife and I found that our budget took a lot of tweaking when we began and a lot of those miscellaneous spending items were either then budgeted for and cut out of our spending as we realized how much we were spending on unnecessary items.

  • http://www.americanbankingnews.com/ American Banking News

    One thing I’d recommend about budgeting is starting with a big ‘miscellaneous’ category and slowly decrease it as you start figuring out what you actually spend your money on.

    • http://www.rabbitfunds.com Adam

      Thanks for the comment. My wife and I found that our budget took a lot of tweaking when we began and a lot of those miscellaneous spending items were either then budgeted for and cut out of our spending as we realized how much we were spending on unnecessary items.

  • http://www.classesandcareers.com/online-schools_kaplan-university/degrees_business/courses_accounting/degree_bachelor-degree marci

    Great post! I haven’t forced myself to stay within a budget but I REALLY need to and this will be key to remember when deciding on a purchase – the need vs want. Also, thanks for linking to the ‘We can’t afford it’ article. That quote hit me hard.

    • http://www.rabbitfunds.com/ Adam

      Hey Marci, I completely agree. In fact, just yesterday we had to tell ourselves that “we can’t afford it.” We were celebrating our anniversary and found a scarf that my wife really liked. I told her that I would buy it for her for our anniversary. Though we ultimately decided not to get it especially in light of what we were already spending on other anniversary activities.

  • http://www.classesandcareers.com/online-schools_kaplan-university/degrees_business/courses_accounting/degree_bachelor-degree marci

    Great post! I haven’t forced myself to stay within a budget but I REALLY need to and this will be key to remember when deciding on a purchase – the need vs want. Also, thanks for linking to the ‘We can’t afford it’ article. That quote hit me hard.

    • http://www.rabbitfunds.com Adam

      Hey Marci, I completely agree. In fact, just yesterday we had to tell ourselves that “we can’t afford it.” We were celebrating our anniversary and found a scarf that my wife really liked. I told her that I would buy it for her for our anniversary. Though we ultimately decided not to get it especially in light of what we were already spending on other anniversary activities.

  • Pingback: Weekend Linkage: Goldman Sachs, Passive Investing, and Txting $ - Automatic Finances

  • Pingback: Losing your second income? 4 Ways to prepare | RabbitFunds.com

  • Pingback: The Donut Test: What over-indulgence does to your satisfaction | RabbitFunds.com

css.php