It’s common for us to spend the money we don’t have. It’s not about having poor discipline. It’s just the way our brains are wired regarding rewards, emotions, and consequences.
Immediate Pleasure Over Future Pain
Our brains are drawn to immediate pleasure. If we buy something new, our brain gives us a boost of positive emotions like excitement, comfort, or relief. That’s not bad, right? Perhaps, if the item doesn’t cost much. But if it’s costly, then the short-term feeling would outweigh the long-term stress of paying for the item later.
Thinking “Just This Once”
The most common mental justification is the idea that spending doesn’t matter because you’re doing it “just this once.” Our brain would minimise one purchase at a time. It will ignore the fact that these small decisions would accumulate over time. This leads to a pattern wherein we believe that spending slowly or seldomly for things we don’t actually need becomes normal.
Emotions Taking Over
In most cases, money decisions are not logical. We spend money because we are sad, bored, stressed, or celebrating. Instead of addressing the emotion itself, we buy stuff to cope. This only reinforces the habit.
Illusion of Future Income
The illusion of future income will cover today’s spending is another strong justification people make. The brain would overestimate financial certainty when there’s an upcoming salary raise, bonus, or side income. This is a false sense of security that often leads to poor financial decisions.
Comparison and Social Pressure
Seeing others spend will make us feel like we should keep up. My brother has a new pair of shoes, so I should buy a pair. Our neighbors went on a vacation, so we should go on one as well. My friends are going to a concert, so I should go as well. This comparison effect would push people to spend beyond their means just to feel successful or feel included.
