Even the best laid financial plans can go awry when a spending trigger is set off. Whether you’re celebrating a new job, mourning a bad break-up, or taking advantage of a deal that is just too good to resist, it’s important to identify the situations and emotions that lead to overspending. Here are four common wallet-emptying triggers and some simple strategies for managing them with the Level Money℠ app.
1. Feeling all the feels: Our emotions can play a big role in our spending habits whether we’re feeling angry or elated, lonely or celebratory. Retail therapy may lure you in with the promise of (temporarily) improving your mood or you may be tempted to buy yourself a treat for a job well-done. In the moment, it’s easy to feel justified in making these purchases, but when things return to normal, you may regret the splurge.
How Level can help: It’s hard to predict when these feelings will arise, so your best bet is to stay informed of your current financial situation so you know when to say “no” to emotion-fueled purchases. This may sound like a lot of work – but it only takes a few seconds to check your Spendable screen and find out if you’re on target with your spending. If you’re above your goals for your monthly expenses, you may have a little wiggle room. Otherwise, you could end up spending beyond your means.
2. Mo’ money: If a raise at work, a substantial tax refund, or a relative’s inheritance has left you with you more money in your bank account than usual, it’s tempting to increase your spending along with it. But if you haven’t addressed other financial priorities like paying off debt, saving up for emergencies, or planning for your retirement, spending all that extra cash could really hurt you down the line.
How Level can help: The key to avoiding lifestyle inflation is to trick yourself into thinking that you don’t have as much money as you do. If you don’t want to burn a hole in your pocket, one way to do this is to adjust the “Plan” section of your app with don’t count for any increased cash flow. This will keep your Spendable amount from going through the roof which will hopefully keep your spending habits from getting out of control.
3. The Best Deal Ever: Whether it’s a buy-one-get-one sale at your favorite shoe store or 60% off a last-minute getaway to a destination on your bucket list, it’s hard to say “no” to a great deal on something you love. Unfortunately, if you weren’t planning to save up for this purchase, these bargains can end up costing you more than you can afford.
How Level can help: You probably have a good idea of the types of deals that tempt you to overspend, so create a custom tracker in the app for that category(e.g. “shoes” or “travel”) that you can reference whenever a great bargain appears. Identify how much you can spend on this category per month or year, and walk away from a sale if you’ve already hit this amount.
4. Peer Pressure: It appears from posts on social media that all of your friends are either moving into beautiful apartments, having an epic spring break, or dining out at all the hot new restaurants. And while this probably isn’t the case, it is tempting to want to keep up with the Joneses – a desire that can become a major drain on your bank account.
How Level can help: It is possible that the same friends who are flaunting their lifestyle may also be going into debt and failing to plan for their future. Meanwhile, you are taking important steps to become financially independent, and you should feel good about that. By checking in with the app a few times a week, you can give yourself a pat on the back; you’re doing great at this adulting thing!
Not sure if any of these spending triggers are a problem for you? Go through your transactions list for the last month and create a tracker for any unplanned expenses. You may notice a trend in what causes you to go rogue with your money.
Level Money℠, powered by Capital One®.
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