Five Causes of Overspending

We’re still in the summer hole where the kids are out of school, but camp hasn’t started. My wife is still working and finishing up the finals on her last class in her pharmaceutical regulation MBA*. She’s spending dozens of hours running a raffle fundraiser for the state’s pharmacists**.

For the last couple of days, it has just been me and the boys. The good news is that we’ve been able to spend some real quality time together. We’ve gone to the beach. We started a pizza company.

One thing that I haven’t done? Thinking or writing about money (other than our virtual pizza customers). That’s a good thing, like the next evolution of money is not worrying about it much.

Today, I wanted to dig into old notes that I had from a online chat with a friend. Again, since I haven’t thought about this much, it may be best to get the ball rolling and have a community effort filling more ideas in the comments.

Because the conversation with the friend was so long ago, I don’t remember the background or context, and my notes are shoddy to say the least. The gyst of the conversation was that there are five reasons why people overspend. (There may be more, but these are the ones that we identified.)

1. Keeping up with the Jones

My friend is excellent at reigning in his spending on “stuff.” I’m just very good. I have a weakness for children’s STEM toys (as you can tell from above). I don’t feel the need to have the biggest house or nicest car. In fact, with the amount of dogs, kids, and beach my car goes through, it’s not worth having a nice car.

Personally, this can be a bit of a trap because our kids go to a private school where most of the people are wealthy. The average “Jones” there has a lot of money to flaunt.

2. Advertising

Robert Palmer sang it best, “you like to think that you’re immune to the stuff, oh yeah.” Yes, I do like to think that advertising doesn’t effect me. I’m pretty analytical with my purchases and planning. However, it would be foolish for me to pretend that I am immune to it.

3. YOLO Mentality

I used to laugh at the Yolo Only Live Once (YOLO) Mentality. It can almost be literally used to justify any action. At the same time, there’s a kernel of truth to that idea.

In fact, in the past we used to say, “You can’t take it with you”, meaning that money isn’t going to do you a lot of good when you die. I personally have a lot of trouble of with this balance. I almost always go with the option that involves not spending money. However, there are a few times when I missed out some really great experiences. For example, Weezer went on a short tour playing only stuff from the blue album and Pinkerton (my favorites) and I cheaped out.

4. Self-Licensing

Self-Licensing is a little like the YOLO mentality above. However, in this case you aren’t spending because “you only live once.” Instead, you are spending because “you deserve it.” For example, you might impress the boss with a great presentation, to celebrate you go out and spend $50 in drinks at a bar.

I’ve been doing a little self-licensing myself lately. When I get through a tough day and it more or less went okay, I’ve been having a Chipwich knock-off ice cream sandwich from Aldi. It’s not very expensive (about $0.75 each), but it isn’t healthy at over 300 calories.

5. Convenience

Spending for convenience may be one of the reasons we can relate to most. Have a tough day and don’t want to make dinner? There’s a Chipotle app for that. Don’t feel like making your own coffee in the morning? There’s a place for that as well.

My big convenience spending comes in home maintenance. I don’t like to do yard work and I’m not very handy with a lot of other stuff. Fortunately, I find it relatively convenient to make some slow cooker meals that can save us from going to restaurants.

Final Thoughts

What are your overspending urges? Can you find any new categories that I missed? Let me know in the comments.

* I think it’s notable that we’ve made healthcare so complicated in the US, that pharmacists like my wife are pushed to get an advanced degree on what seems to amount to man-made political problems. This isn’t my area of expertise and maybe all other countries have this issue.

** You’d think that selling raffle tickets wouldn’t be time consuming. Coordinating the paper trail of people selling (and losing) paper tickets is a mess. I thought that an online system would be easier, but it currently goes against Rhode Island law.

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