Hi, it’s your Money Mavens and the signs are all there…
You got a new influx of cash and that third Coach handbag is begging you to slide it into your checkout cart.
Ten seconds later and you’re wincing at the total amount.
“But these bags are to die for!” We know!
“That last one will look sooo good with my new top!” Girlfriend, we hear you!
And that’s the real tug-of-war.
Your brain says “Just get the one bag you can afford. Save for the rest!”
But your heart is straining to do some ‘creative’ math – trying to justify spending outside your budget.
You want all those bags. No, you need all those bags! If you don’t get that third one now, you’ll never get it!
At least, that’s what your heart is saying. That’s the voice of FOMO: the Fear Of Missing Out.
Despite our better judgments, saving and spending often boils down to an emotional decision.
An entire library’s worth of psychology studies show us it’s easy to say “yes!” to short-term wants (read: making a money mistake) while ignoring the eventual pain we’ll suffer in the future because the money we need isn’t there anymore.
But FOMO has a super convincing voice. You’ve heard it. We’ve heard it too.
And if you’re often experiencing FOMO, you could be FOMOing yourself out of the life you truly want to live.
What does living at the mercy of FOMO look like? Here are three signs…
1. You often regret spending the day after, or when the credit card bill shows up.
That’s right, good old-fashioned guilt kicks in when the ‘love letter’ from VISA shows up each month.
What starts running through your mind?
- Did you have a few too many cosmos at the bar and pay for your entire team’s tab?
- Did you level up your workout subscription because your rival from work got that MembersPlus star next to her leaderboard name?
- Yes, that last-minute trip to the coast with your girlfriends was a-mazing, but it was also way more expensive than you realized.
- Note to self: it’s probably wise not to go on Amazon after two glasses of Pinot.
Then, what happens?
Maybe you start emotionally punishing yourself…
Or looking to see if there’s anything you bought that you can still return…
And promising yourself you’ll do better next month…
That’s a spending hangover – and it usually doesn’t make things right or make you feel better about yourself.
2. You find yourself rationalizing spending.
Your friends invite you out for a night on the town, and you want to go!
Or, there’s a sale at Nordstrom.
Or, your iPad screen cracks and you need a new one — right now.
Or, fake it ‘til you make it right? Yeah, you should definitely lease that BMW.
3. You’re always making deals with yourself that you then break.
You promise yourself you’ll stop overspending next month.
But guess what? Next month is never this month.
Instead, you take money out of your retirement accounts to pay for things you’re afraid to miss, and promise yourself you’ll pay it back.
You buy things like trips and cars, only to realize that those consumption items soon lose their luster or disappear altogether, leaving you holding the bag.
In this case, the ‘bag’ is an abused retirement account that you’ve promised yourself you’ll repay, but there’s no flexibility in your budget to actually repay the loan from savings.
So, how do you get out of the grip of FOMO when it comes to spending and saving?
When you’re standing in the aftermath of FOMO, you may even say some unloving things to yourself.
You’re more than just your money mistakes.
We’ve all made our own share of money mistakes… and dating mistakes… and time management mistakes… and hiring mistakes…
The good news is you can follow a different path moving forward.
First, you need to know your weaknesses.
If you know what you tend to spend on, you can budget for that expense.
Open a savings account especially for new clothes, nights out, or vacations.
(Hint: the Profit Boss® cash flow automation system does an incredible job planning for those “Oooo, that’s so shiny!” impulse moments.)
Second, you need to identify with your future self.
Take 20 minutes and imagine yourself 20 or 30 years in the future. The imagery is important here.
Get a magazine or get on the Internet and find an image of a woman you might look like at that age, and imagine that is you.
Try to imagine the thoughts she’s having about her financial life.
If you never stop overspending, your future self will almost certainly be regretful and ashamed. (We talk to these folks all the time.)
There is nothing you can do to change the past, which is why regret doesn’t have expiration dates.
If your future self has a nice cushion of savings, imagine the freedom you’ll have to travel and spend time with loved ones.
You can know you were prudent and responsible in your early years. Imagine being in the position where you know you can retire comfortably.
If you’re aware you’re only emotionally connected to the present and not the future, that’s the first step.
Taking the steps to emotionally connect to the future — even if it’s a fear of messing your future up — can be your key to rightsizing your lifestyle.
And in the end…that designer handbag will feel even better when you know you made the right decision to pay for what you can afford right now.
Cute bag, by the way!
To your prosperity,
Your HWM Money Mavens
