3 ways to control your spending in 2014

Science has thrown up some fascinating facts about how the brain operates when we're in consumer mode, and the processes at work when people over-spend. 

Apply some science to control your spending

There are three main factors at work - and to watch out for - if you want to keep spending under control in 2014:

1. Biological Factors: Don’t go shopping if you’re hungry, pre-menstrual or have just emptied your bladder.

You may not realise that your physiology is affecting your behaviour. But when you're hungry you will buy more food and make higher calorific choices at the supermarket. When in an anxious state you will be more likely to impulse-buy. That's because the physical state of high arousal leads to a depletion of the resources that govern self-control. And fluctuations in activity in the brain’s orbitofrontal cortex during the menstrual cycle will make you more likely to go on a spending spree when premenstrual. And more rational and controlled post-ovulation. Even an empty bladder affects your brain’s control mechanisms. Science has shown you’ll be more likely to (sorry) splash out if you’ve just spent a penny. So pay attention to your body before hitting the shops, it may be telling you to hold fire.

Try timing shopping trips with your menstrual cycle and avoid the pre-menstrual phase

2. Emotional factors: Don’t shop if you’ve just had a row, a stressful day or been dumped by your boyfriend.

People experience a range of emotions (anger, fear, sadness) in their daily lives and engage in all sorts of behavioural responses to keep them in check.  Some women find shopping gives them an emotional outlet, the way that alcohol or drugs can do for others. It distracts them from negative feelings and provides comfort in the form of a treat or reward. In fact studies of compulsive buying have shown that its prime function is to repair mood. So spot when emotions are running high and find an alternative way of releasing them. Find  distraction through exercise or relaxation, or seek social support by spending time with friends. Concentration, whether on gardening, painting or rock-climbing, is also a good way to absorb negative emotions. And the Do Something Different approach to behavioural change could help see you through the tough times because it's all about about breaking habits and increasing behavioural flexibility.

Buyer's remorse is like a shopping hangover

3. Cognitive factors: Don’t go shopping with low self-esteem and an “I deserve it attitude”.

Impulse purchases can trigger a lot of self-justification in the consumer, to assuage the guilt of over-spending. Their thoughts echo with the messages that have been implanted by constant brain-washing and bombarding marketing campaigns. Thoughts such as “Why shouldn’t I have it?” “I work hard I deserve it” “My friends will love me for it” and so on. Self-talk can also shift the focus onto the wrong things, “I’m saving £100 by buying this in the sale” (instead of, “I’m spending £200 I don’t have") or even "I'll show him!" Some cognitive reframing can help here. Relabel your credit card your debt card. Silently answer the ad-men back. Recall when you last had buyer’s remorse and tell yourself how you’ll feel tomorrow. And find ways to boost your self-esteem so that you can resist the constant bombardment of persuasive messages. 
Few people greet a large credit card bill with the words, “Because I’m worth it”.

7 Signs that you are suffering from Gift Creep

OK, so you've finished your Christmas shopping …. or have you? 

Will you be tempted to buy your friend that 'little extra'? Or find you've bought more presents than you needed and add to the relatives' pile?

Can't stop at one gift per person? 

You may be suffering from gift creep.

People rarely seem to give each other just one present these days. We hedge our bets and give two, or even three, gifts in the hope that one of them will hit the right note.

More than a third (35%) of people say they're disappointed with how the gifts they've bought look when wrapped up and fall victim to 'gift creep', splashing out on last-minute additions, according to research by Currys & PC World.

And nearly a quarter (23%) of people in their survey reported worrying that the other person has spent more, which can lead to nipping out for that little 'extra something'.  

It seems some of us just don't know when to stop shopping!

I've called this behavioural phenomenon ‘gift creep’ and this week, as we get closer to Christmas, is the danger period when we can fall victim to it and start piling on the presents. And that can really add to the cost of Christmas.

Here are my 7 signs you are suffering from Gift Creep:

  

   1.   You’ve finished your Christmas shopping but still buy little ‘extras’ every time you go out

   2.   You worry someone won’t like what you’ve bought them, so you add another gift (like some luxury chocolates) on top to soften the effect

   3.   Before someone visits at Christmas you look around to see if there’s anything else you could give them

   4.   After wrapping all your gifts you feel anxious that the size and number of parcels looks a bit on the small side

   5.   You lie awake at night totting up how much you’ve spent on people - then try to even up the numbers so as not to appear stingy

  6.   You’re all spent out …. but can’t resist those last minute stocking fillers at the till

   7.   You buy a gift for someone, forgetting you've already bought them something, and end up giving them both

So if you've finished, try to draw a line under the shopping and say 'enough's enough'! 

Otherwise, gift creep creeps up year-on-year until it reaches unmanageable, and un-financeable, levels.

To help present buyers, get their presents right this Christmas, Currys & PC World has launched a special Gift List service. The online tool makes getting the right gift easy and, as well as helping you pick the best presents, every day someone will win their entire Gift list throughout the festive period.

Is clothes shopping a costly mechanism for maintaining self-esteem?

     Remember the first time you went out and bought yourself something to wear? With your own money and without your mum in tow? For many people this was a rite of passage from childhood to  adolescence. The time when possessions started to act as an extension of the self. When the clothes we wore were critical to the development of our identity. It's no coincidence that materialism peaks at mid-adolescence, just when self-esteem starts to take a bit of a dip. And fashion psychology tells us that, for many, clothes shopping becomes a lifelong (and costly) mechanism for maintaining a reasonable level of self-esteem.

     In the course of a lifetime it’s estimated that women in the western world shell out an average of £84,000 (or $107,000) on clothes. If a woman’s clothes shopping years extend roughly from age 16 up to 86 years (although more is spent in the younger than the older years) that’s 70 years, or 3640 weeks, of clothes-buying. And that works out at £23.07 per week. Every single week. It’s a frightening sum. And yet:

• A survey I carried out revealed that 82% of people have at least one item in their wardrobe that they have never ever worn. 
• I also found that one in ten people have at least ten unworn items still with the label on.
• A US survey reported on EliteDaily.com said that 60% of women say they still struggle to find something they want to wear to work or on a night out. 

     Contrast this with Marie Curie, who got married in her navy dress and wore it every single day afterwards, because it wouldn’t show the stains from working in the lab.  Nowadays many women put effort into finding the perfect garment to solve her current wardrobe crisis. Or  current emotional crisis. And many modern woman are seduced into believing that each season must herald in at least one new dress, jacket, coat and pair of trousers. 

    But the secret of dressing well may lie in wearing what you’ve already got in your wardrobe. Reinterpreting those clothes in a stylish and individual way, without needing to add another item. In fact, having more clothes simply adds to the confusion and dilemma of dressing by creating option overload. And buying more simply leads to hedonic adaptation, as I have written about in an earlier fashion psychology blog.  

     Researchers know that our brains encode perceptual information in predictable ways. The brain groups together items that are similar and categorises each new experience according to how alike it is to a previous one. It is wired for sameness, so no wonder novelty feels so exciting. That's why simple changes like going a different way to work, rearranging the furniture or trying a new type of food can give the brain a stimulating prod, diverting it from the old well-trodden path and sending it down a new, excitingly different, pathway. 

     So next time you're tempted to make a 'quick fix' purchase take a step back. Ask yourself if you actually need something new. Or if just need some novelty, to give the sartorial part of your brain a jolt. If so, why not try the following with the clothes you already possess?

• Mix unexpected fabrics and styles to create exciting contrasts; leather with chiffon, tweed and taffeta.
• Forget dainty heels and mix the prettiness of a frock with socks and flat boots.
• Soften the hard edges of leather by pairing a biker jacket with vintage lace or cashmere.
• Try layering or mixing garments in unusual combinations. Wear one dress over another, layer two or more t-shirts, wear a vintage bra over a vest-top or a petticoat over a skirt.
• Men’s clothes are often better tailored than women's; try a man’s jacket belted with a vintage brooch for a cool style. Or turn a large cotton man’s shirt into a shirt dress by elasticating the waist.
• Reverse clothes, wear them upside down or inside out for a new quirky take on an old garment you’re bored with. Rip off and replace the buttons or tie dye the fabric.
• Don't wear things in the way they were intended. A belt can be worn as a necklace. A table cloth transforms into a quirky wrap-around skirt. I have a scarf that’s actually the sleeve of a man’s jacket complete with paisley lining. The friend who made it also makes skirts by sewing lots of men’s patterned ties together. Sleeves sewn together can add up to a funky and unique skirt.

Upcycled outfit by Asli Jackson

• Don't throw out old jumpers, use the sleeves to make cuffs, fingerless gloves or leg-warmers. 
• Revive old trousers as shorts to be worn over funky tights, or unpick the seams and turn into a skirt.
• Cut slashes in an old woollen jumper, hot wash it to seal the edges and create a lacy effect, wear over a contrasting colour t-shirt.
• Take inspiration from artists, like Anu Tuominen who makes bunches of woolly gloves into a shawl, or a scarf from dozens of mis-matching colourful woollen socks.
• Look out for workwear or old military or naval uniforms and make the most of their durable fabrics and stark simplicity.
• Break every colour-matching rule. You will inject energy into any outfit if you STOP MATCHING EVERYTHING.
• Look for recycled fashion labels like TRAIDremade who make an art and a business out of upcycling and transforming old garments into new.
• Or From Somewhere who rescue discarded fabrics from the dustbins and floors of fashion rooms and turn them into beautiful clothes.

     It is sad to think that billions of tons of unwanted clothes get thrown away every year. And that millions of pounds worth of debts are racked up every year through people buying clothes they don't need with money they don't have. 
     So instead of shopping for new clothes why not use some of these creative ideas to save money and work on developing an individual style from the clothes under your nose.  Make your wardrobe work for you, instead of you working for your wardrobe.

Moments of Weakness: Five Impulse Spending Triggers

Do you know what your weak spot is? Is it the shoe section in Harvey Nicks or those racks of beauty products at the airport? Do you buy more food when you're hungry (who doesn't)? More clothes when you're stressed? More gifts when feeling guilty? More of anything-that-isn't-nailed-down when you're pre-menstrual and have just been paid?

People rarely buy stuff for utilitarian reasons. Buying is more often the result of mind-boggling marketing tricks, seductive store layouts and a whole host of biological, psychological and even evolutionary factors.  

Purchasing decisions aren't always made rationally

We aren't always in as much control as we'd like to be, as the growing number of people with credit card debts or compulsive shopping disorders will testify. And men and women shop differently, with more women inclined to spend on impulse.

Impulse buys are a buyer's curse and a seller's dream. 

A recent article on the excellent Huffington Post website has captured the Five Big Moments When You're Most Likely to Overspend. 

According to their writer Candace Braun, those moments of weakness are when:

You're Mindful of The Time:  A slogan that urged people to "spend a little time, enjoy C&D's lemonade," resulted in more people buying a drink, and paying 51% more for it (compared to a those who saw a sign that asked them to "spend a little money"). This 2008 study from Stanford University showed that  'spending time' feels more like buying an experience, not just handing over hard-earned cash. Slogans linked to time, like 'thank Crunchie it's Friday' work in the same way.

If the time seems right.....

You're Trying to Avoid The Crowds: You may feel super-organised shopping at 7 a.m. on a Wednesday, when Tesco is blissfully quiet, but your purse could take a bigger hit.  Being in a crowd makes us less likely to overspend, according to a Journal of Consumer Research study. We are more focused on getting out unscathed than on making another purchase.

I know you didn't come out to buy this, but here you are!

You've Got Money in Another Account: That offer of the £100 bonus for opening an extra account seems a no-brainer. However, a May 2013 study found that people tend to save more when they have just one place to deposit money.  Researchers say that with one account it's easier to keep track of how much is in there -- and how much you're spending. When we have multiple accounts, it's easy to spend from one while feeling reassured there's money in the other account too.

You've Got to Buy Something Embarrassing: To try and mask the embarrassing item in their basket, almost 80 percent of people will pile in unnecessary extras to divert the cashier's and other shoppers' attention, a Journal of Consumer Research study found. Online shopping could be the answer here!

Gift purchases are less guilt-ridden

You Need Some Retail Therapy: It's common to feel the urge to splurge when emotions are high or mood is low. My research has also shown that 75 percent of women are more likely to overspend or impulse buy when treating someone else. Feeling low can lead to us literally trying to buy happiness and buying gifts for those we care about can help us feel more connected to them, as we say in Sheconomics. Of course, buying for someone else doesn't induce as much guilt either when money is tight.

Thanks again to the Huffington Post for bringing these spending triggers to light, and for including Sheconomics in their article - it's always nice to reach out to our US readers - issues with money cross cultural boundaries and oceans too.

Do you need some emotional reconditioning when it comes to money?

Whether we’re strapped for cash or mega-rich, our relationship with money can be a highly emotional one. A mere mention of the ‘M’ word triggers all sorts of complex feelings in many people. Why? 

It may be because of the way our parents talked to us about money. Or due to bad habits that we have developed as adults. However, one thing is for sure. If you can improve your relationship with money you’ll feel happier and healthier all-round.

Financial decisions are always rooted in our psychology. Shall I buy this or not? Attack this money problem or ignore it?  Spend for today or save for tomorrow? 

These choices involve a tug-of-war between the sensible part and the emotional part of our brain. The emotional part may be our childish self. The one who wants to leave decisions to someone else. The one that’s scared of responsibility. Impulsive or even greedy.

Many financial decisions involve a tug-of-war between the sensible part and the emotional part of the brain

Giving in to the emotional side can affect our self-esteem as much as our bank balance. It  leaves us feeling empty, anxious or even depressed. These feelings can trigger a spending spree or financial meltdown. Then before we know it we’re caught in a vicious cycle. My research has found eight out of ten women use shopping as a way of treating their moods, so it’s vital to seize emotional control.

In Sheconomics we captured some of the troublesome thoughts women said they have about money. Perhaps you recognise some of them yourself:

• I'm ashamed to own up to not understanding my finances
• I'm totally confused when it comes to making any money decision
• I don't feel grown up when it comes to money
• Money worries keep me awake at night
• I'm scared to face up to my debts
• I’m worried about making the wrong money decision
• I'm embarrassed about how much money I've wasted over the years
• Shopping is how I lift my spirits when I'm feeling low

How many of the above apply to you?  

If it’s three or more you may be letting your emotions rule your money. The emotions that crop up most regularly are fear, guilt and embarrassment which, if not dealt with, risk harming your financial situation. A bad financial situation can affect physical and mental health or damage relationships. That's why emotional management is where financial management begins. 

Frightened about money? Fear leads to paralysis so try these small actions to help beat it:

• ·      Trick yourself into saving by setting up an automatic direct debit into a savings account each month.
• ·      Subscribe to a friendly money newsletter so you are drip-fed with money matters (see www.sheconomics.com).
• ·      Confide in someone who’s good with money, own up to your fears.

 

Embarrassed about money? If you feel ashamed at how little you know or how badly you manage your money, try these:

• ·      Explore a jargon-free website (e.g. www.savvywoman.co.uk or www.sheconomics.com).
• ·      Schedule regular money chats with your partner or close friend.
• ·      Make yourself negotiate a better deal (e.g. on your mobile phone/energy contract) or demand a refund for poor service or shoddy goods.

 
Guilty about money? Guilt can lead to secrecy or pushing money problems under the carpet. Try these strategies:

• ·      Get a sensible money buddy. Shop with them, and talk through money issues too.
• ·      Leave your credit card at home. Carry only the cash you can afford to spend, no more.
• ·      Organise your paperwork into bold coloured files and visit them often.

As well as these, use some emotional reconditioning strategies to help bring the sensible part of the brain back into play. And continue to monitor your money emotions to keep them in check. Try to:

1. Identify the emotion. Be as specific as you can. (Am I ignoring my credit card bill because I’m ashamed of buying that expensive make-up?).
2. Ask where it comes from. The cause may not always be obvious. Is it a reaction to the present or a voice from the past? (My mother always felt bad if she spent money on herself, she made us feel the same).
3. Challenge the emotion. Is it useful now? (My mother had to be frugal  - but as long as I can afford it and budget carefully, I needn’t be so hard on myself).
4. Connect with what you want. Think of a future goal not your current feelings. (I’d like to get the deposit for a house, I’ll feel proud to own my own place).
5. Do something different to act against the emotion and change your feeling. (I’ll pay the bill,  enjoy what I’ve bought, then budget for saving and spending each month).

Finally, for a simple financial health and free practical advice visit www.moneyadviceservice.org.uk

This article first appeared in Healthy magazine May 2012. Available from Holland and Barrett stores or via online subscription.