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Why Bad Spending Happens to Good People

Nick Tasler, director of research & development for global think tank TalentSmart®

There you are basking in the soft, warm glow of department store lighting knowing you should leave. Yet you don’t. The next thing you know your bag is a little heavier, your credit debt is a little deeper and you can’t help thinking: Ugggh, why did I do that?!?

Whether it’s clothes, cars, dinners or homes we all buy things we regret. With the possibility of recession and even depression looming large, impulsive spending can be more than just annoying. It can be downright fatal to our financial health. So why do we do it and what can we do to prevent it?

Impulsive spending starts with the pumping of an excitable brain chemical called dopamine. Dopamine can be a lot of fun. It’s what makes you feel giddy when you see something you want like a pair of shoes, a promotion, or an attractive mate. It pours into your brain’s frontal lobe--the part you use for rational thinking--and focuses all your thoughts and emotions on obtaining that thing.

But when the object of your desire plays hard to get, dopamine doesn’t throw in the towel. It kicks into overdrive. Dopamine’s dark side can inspire you--against friendly advice and your own better judgment--to dial up your ex-mate a few too many times or buy something you wish you hadn’t. When your rational brain should tell you to save your money or to put the phone down, it is silently drowning in a sea of dopamine. That’s when impulse overpowers reason.

Here are a few tips to harness your impulses:

1. Dream a Good Dream - Dopamine can be a gift. It keeps you striving to obtain what you want until you get it. It’s only hazardous when you focus on obtaining the wrong things. Instead of imagining how exciting it would be to have those new shoes, imagine the excitement of finally being debt-free. And really imagine it. Literally, day-dream about sleeping peacefully without the worries of debt burdening you. Imagine quitting that job you hate, or getting your kids into that great class that’s just a little beyond your reach. The clearer that dream becomes in your head, the more it will edge out your impulse to buy shoes, clothes, or furniture that you don’t really need.

2. Steer Clear of Test Drives - Have you ever thought about why car dealers want you to test-drive? Customer test drives take up more of the sales person’s time. They add miles to the car. They burn gas that dealers will then have to replace on their own dime. They risk damaging a car that would otherwise be safe sitting empty in the lot. Still, dealers would love for you to take the car for a spin. If you are cruising down the road in that car, adjusting the temperature, switching on your favorite radio station and yelling at illusory kids in the backseat, you are going to have a much clearer vision of what it will be like to really own that car. And guess what that means?

Suddenly, your dream of being debt-free is curbed by the very real dream of driving home that new car. Now, a surge of dopamine is on the job to help you make the new car dream come true. The same holds true for trying on a new pair of shoes, free mini-makeovers at the mall, or food samples at the grocery store. Despite your best intentions only to take a quick jaunt around the store, dopamine has other ideas the moment you slip those beauties on your feet. And you don’t want to challenge dopamine to a battle of wills. It can and will disarm your rational thought processes.

3. Covet Your Own Goods - When it comes to impulsive spending, idle desires are truly the devil’s workshop. Well-intending commandments that tell us what not to covet fail to address what to covet. That’s dangerous because you can’t simply turn off desire. Since we are all suckers for new things our desires will naturally wander toward something new and visible like thy neighbor’s car, clothes or house. Once you start coveting, dopamine returns to the scene until you get what you desire--often despite your best interests.

But with practice, you can guide your desire. I’ll bet that you sort of like your family. You probably already own a favorite outfit, and your health is not too shabby. In other words, you already possess a lot of goods worth coveting. Remind yourself daily what they are. Every morning, scribble down a few covetable possessions on a piece of scratch paper and read it a few times throughout the day. Do this every day. Eventually, focusing on the goods you have will become a steady habit slowly eroding the impulse to spend.

Be confident in the well-documented fact that the one desire even more enduring than our common want for new things is our universal drive not to lose what we already have.
 

About the author:

Nick Tasler is the director of research and development for think tank and consultancy TalentSmart®. His new book, "The Impulse Factor: Why Some of Us Play It Safe and Others Risk It All," reveals how a newly discovered gene mutation affects our individual levels of impulsivity and discusses the advantages and pitfalls of impulsive, risky behavior. “The Impulse Factor” is published by Simon & Schuster.