My friend and I went to a networking event in a high end store with beautiful, classic, and well-made merchandise. A gorgeous deep pink/burgundy leather bag was raffled off. It would go with black, grey, blue or brown attire and since I’m a value shopper, this is what I marveled at most. The bag was priced at $350-$400 and my friend won it!
Saving Money" by Winning
I was excited for my dear friend and she of course was thrilled. As we left the event, that feeling of being elated and successful floated over us. She scored big time and we both found a couple of other good deals. You could say that we were feeling rich because we perceived our haul as much more valuable than the price we paid. This is a dangerous feeling, and here’s what happened next.
We walked by some beautiful Chanel-like chains. My friend was wearing a conservative, classy navy outfit and sported a necklace that was complementary but not WOW. When we met at the event she’d expressed a desire for something nicer. You can guess what happened. She tried on the necklace, and bought it. The cost was somewhere between $100-$200. Did it look perfect on her outfit? Absolutely. Would she have spent that money if she hadn’t already “saved” on winning a bag? Not sure. It didn’t help that I prompted her to try on the necklace.
"Feeling Rich" Translates to Spending More
Since she’s smart at budgeting, there is no doubt that she could afford it. But what if she couldn’t? What if she was riding the tide of emotion and feeling rich, but with no room in her budget? I made matters worse by adding peer pressure to the mix.
When credit card balances are a bad surprise, debt is high and savings aren’t enough, it’s really important to recognize how we get caught up in emotion and justify unplanned expenditures. When we experience feelings like this, sometimes the better move is to walk away and think about it overnight. Let the feeling of wealth and elation settle. If it’s still the right thing to do the next day, we’ll know it.
Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. Behavioral Cents, LLC and any third parties listed, linked to or otherwise appearing in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies.
Carrie Rattle is Founder of BehavioralCents.com and a veteran executive of financial services. She works with women to build money confidence and change their money behaviors for the better - without deprivation. Instead of simply telling women what to do, she helps them fight the tide of daily temptation to reach their dreams. Women gain control and feel comfortable making their own wise money decisions. Thoughts always welcome: firstname.lastname@example.org.
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