People Need An Excuse To Spend Money, And They’re Eager To Find One

4WD stuck in snowDo You Justify Your Purchases? What About The Bad Ones?

A few weeks ago, I was sitting at home watching some T.V. with my wife, after watching 27 inches of snow fall. We were snowed in the day before, and could barely get around on day 2. It was the top of the hour so there was a news update, and that’s when I heard it. I almost couldn’t believe my ears but my wife confirmed what I thought I heard.

We watched a news report that stated people were considering an upgrade to a 4WD vehicle—due to the recent winter storm.

My jaw dropped to the floor in disbelief, but then it occurred to me that this is not so uncommon. The reason I was so awe struck by this news bulletin was because I live in Charlottesville, VA—not Upper Michigan. This was the first “significant” snowfall the area has seen in nearly 8 years. So why then would people use this unique instance to justify buying something they really don’t need—they just want?

Justifying a purchase by declaring a want to really be a need, is hardly justification at all. It’s a lie. I have definitely lied to myself over the years, but no longer.

We are so eager to find a reason to “need” something that the first chance we get we throw ourselves at it. People wanting to buy a 4WD vehicle in Charlottesville just because of one snow storm that rarely happens—is irrational. It’s just an excuse to go out and buy something. Let’s be honest. I’ve done it, and so have you.

Our behaviors with money keep us from having what’s really important. It amazes me that people are willing to go into debt to buy a vehicle that will “only possibly” keep them from getting stuck—the one time it does snow, but they can ignore the fact that they do not have an emergency fund.

There are countless reasons to be prepared for financial hardship, but you do not hear people flipping out, saying things like, “I don’t have an emergency fund, maybe I should save one so I can be prepared for the next slumping economy?” Nope, you don’t hear people saying that do you? Why not though?

YOU NEED AN EMERGENCY FUND WAY MORE than you need a 4WD! A big screen T.V.!ย  A boat! That vacation! Those credit cards! There are a lot of things you need more than those things. For starters, you need to be prepared.

How much better would your financial situation be if you justified saving yourself an emergency fund? How about if you justified paying off your debt? If you would have been as enthusiastic about building a secure future for your family, as you were about using debt “as a tool”—how oblivious would you be to this recession? How much better off would you be right now? I think we all know the answer to that.

We refused to take part in the recession, by preparing for “it”.

I am not trying to imply that you wouldn’t be affected at all, but I AM saying your life would be a LOT less stressful right now. It wouldn’t be a crisis. If you had an emergency fund with at least $10,000 in it, what you’d have is more time to make better, more informed decisions instead of rushing because you need money yesterday. As I stated in this interview with @ClariFinancial, “crisis living is no way to live.”

I’ve got news for you. Crisis-living gives you the disadvantage.

If you stop looking for excuses to spend your money, you will have more of it to spend. You can avoid a potential crisis, by understanding that saving money for your future is not going to keep you from enjoying life, it will instead give you a life to enjoy. It’s hard to enjoy life when you owe people money, because they will ask for it back. Get rid of those people by not borrowing their money. That’s when the ball will be in your court.

Make Different Excuses

I have an exercise for you to do.

If you’re going to make excuses, you should at least be making the right ones. So here’s what you do. Take out a piece of paper and write down EMERGENCY FUND at the top. Turn having an emergency fund into a need, as opposed to what it is now—a want. Do just like you do when you justify a purchase. Write down all the reasons you have to start saving for an emergency fund. Talk yourself into saving money. Can you do that? Umm…you NEED to!

Already have an emergency fund? Do the same exercise by justifying why you should pay off debt. I bet you can come up with a lot of reasons to start now. If not, let me know and I will help you. ๐Ÿ˜‰

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About Brad Chaffee

33 Responses to “People Need An Excuse To Spend Money, And They’re Eager To Find One”

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  1. I have justified a LOT of things in my lifetime. Over the years I have gotten much better at delaying pleasure. One good thing to do as admit outloud is “hey i just want it” that has helped me cope a lot better with saying no to myself. Its ok to have nice things at times but only when you can actually afford them.

    Good post!

  2. Sharon says:

    Brad – good article! I especially like “saving money for your future is not going to keep you from enjoying life, it will instead give you a life to enjoy” That is so true!!!!

    Sharon

  3. Aaron @ Clarifinancial says:

    I’m secretly a car nut too. I don’t just follow the new pretty cars coming out, I watch the industry stuff too and technology. It kills me every time I see statistics like this. AWD sales up in the winter or fuel-efficient sales up when gas prices climb. It only proves folks don’t think long-term about even major purchases. It shouldn’t matter what the weather is like now or what gas prices are now, but what will those factors look like over the life of your vehicle.

    It’s harder than it sounds sometimes to let strategy and clarity rule your decisions, instead of emotions.

    Thanks for the mention, BTW. It was a great interview.

  4. Gina says:

    “Justifying a purchase by declaring a want to really be a need”
    That would be me. Like the time I just had to trade in my Blackberry for an iPhone. Its for business you know. The monthly rate is less (not by much). Reality was it didn’t have some of the perks I was used to having with the Blackberry. I’m still trying to find a really good iPhone GPS app that is inexpensive, that TALKS to me.

    As for an emergency fund, I am on Dave Ramsey’s Baby Step 2, the Debt Snowball. I do have $4000 in an emergency fund (higher than Baby Step 1 because of the business). I’ve learned a lot this past year and am on target to get debt free.

  5. Oregonsun says:

    Good article. We have a small emergency fund that we are working hard to grow. This month we have had 3 murphy attacks! aarrgh….we are so glad that we could go to our emergency fund and pay for them and not put them on a credit card. Whew!

  6. KelsaLynn says:

    Great post! I think about some of the things we’ve purchased previously because we “needed” them and it makes me sick to my stomach, literally. I get a stomach ache thinking about it. Boy were we … dumb?… ignorant?… how about just plain old NORMAL! Jeesh- have we ever wised up and we’re only 28 years old!

  7. FrugalNYC says:

    Good post and subject matter.
    Not only in personal life, but I’ve seen similar ideas in business.
    Fix the fire short term an forget it. Long term strategy never gets looked at.
    Yes, you need to brainstorm and think and plan – A LOT – but once you are there, you’re set for the long term.

    More people need to do what you mention. Think long term.

  8. Simon Zhen says:

    So true. Great wake-up call to all those who attempt to rationalize every unnecessary purchase they make. We are very much inclined to deal with the situations facing us now rather than taking the long-term view.

    It just goes to show again and again that we need to step back and take 2 days to think about it before actually forking over the money. If I forget about it by then, then it probably wasn’t much of a concern.

  9. This used to be one of my major problems. Thankfully, I over-analyze almost all purchases these days.

    David Damron
    LifeExcursion

  10. Excellent post Brad! I think the reason it’s so easy to make excuses to buy things is because buying anything is more an emotional excercise than anything else. Inside we want to buy, we just need reasons to justify it, no matter how flimsy. Recreational shopping is an example. There’s no LOGICAL reason to do it, but we do it anyway.

    In regard to having more time with $10,000 in the bank–I’m not certain we’d have any more time, but what we would have is more stress-free time, and that’s a worthy goal in itself.

  11. Derek says:

    Sadly this is very true. I used to be guilty of this from time to time, but I usually talk myself out of it now. I see people do this all the time, sometimes they have a lame reason to buy something or just to go shopping in general.

    How much would you recommend for an emergency fund? I try to keep about 3 months income available.

    • Brad Chaffee says:

      Hi Derek, I am working on saving 6 months of expenses, but I think the answer to your question depends on a few things. Basically the amount should be whatever it takes for someone to feel secure with. I talk about it in more detail here.

  12. Great post, Brad! I can justify anything, really anything. Unfortunately, so can my wife which really puts us in a precarious position. ๐Ÿ™‚ Fortunately, we got our priorities straight and realized that all of our “wants” weren’t “needs”. That was our first step in our journey to paying off $58,500 in debt. Now that we’re debt-free except the house, it’s a lot easier to buy a few “wants” now and then.

  13. Brad Chaffee says:

    Thanks everyone for such wonderful comments!! ๐Ÿ™‚

  14. Ralph says:

    I used to justify my purchases by convincing myself that I needed whatever it was i was buying. Once I began to organize and track my spending, I put an end to that!

    Thanks for posting!

  15. I actually believe people need an excuse to spend money, b/c saving is boring, and people have TOO MUCH MONEY and really do need to spend it and live a little.

    In “Fortunes, Fortunes, Everywhere” I chronicle how a BOATLOAD of people, from policemen, to dockworkers make $100,000+++. There’s so much wealth out there, we cannot imagine. Hence, why we need a reason to spend!

  16. Financial Samurai–Brilliant point about saving being boring! Add the social and cultural cues to buy, buy, buy and you’re cooked unless you can make a concious (and consistent) choice to save.

  17. Brad Chaffee says:

    I agree FS! It’s just unfortunate that people see saving for their future as boring enough to avoid completely. I actually feel pretty good about saving but I realize I may just be a nerd. ๐Ÿ™‚

    I still like the way Dave Ramsey puts it.

    “Live like no one else, so later you can live like no one else.” You can do the boring part in the beginning or the end, and I think it is safe to say that it is NO FUN to do it at retirement. ๐Ÿ™‚

    Oh yeah, and I hope you make that million bucks this year my friend! ๐Ÿ˜€

  18. “Oh yeah, and I hope you make that million bucks this year my friend!”

    I’ll be insanely jealous if he does. There, I said it.

  19. @ Brad & Kevin – Great quote from Dave Ramsey. I guess the real nirvana would be if one can just enjoy everything now in a smoothed out cycle all life-time.

    Thanks for linking to my post, wasn’t sure the protocol. Feel free to link to anything you find relevant or interesting when you comment on my site. I don’t mind at all (donno why others would), and it helps me click on new stuff (mostly why I installed the Comment Luv plug-in).

    Thanks for the well wishes on trying to make a million bucks. It’s obviously a stretch goal, as I said, but why not try? I honestly will probably not tell anybody, except for my wife if I do achieve it ๐Ÿ™‚

    • Aaron @ Clarifinancial says:

      @ FS There’s a contrarian book I keep meaning to check out called “Die Broke” that might be right up your ally. It’s based on what you said – smooth your income and lifestyle over your lifetime, so you can enjoy everything to the greatest extent possible while you are alive. Don’t worry about when you’re dead as much.

      I always seem to have a stack of other books on my list ahead of it, somehow. But it sounds really compelling.

      • Contrarian…sounds like my kind of book. Seriously though, I agree with that concept. We sometimes focus too much on a fat balance sheet or leaving a large estate, but that puts the focus of life squarely on money.

        Quality of life and having a positive impact on the people around us are so much more important. To some degree, SOME money can help us achieve those goals, but in truth none of us will be in this life long enough to reap the benefits of building an empire, and all of what goes into it.

  20. Lateef says:

    Good article. I live in Michigan, I’ve paid off 3 cars in my lifetime. I now have a paid off Mazda Tribute WITH 4WD. 7 years of Michigan winters…I’ve used 4 WD maybe 2 times. The second time I used it, I just wanted to see if it worked. Folks think they need to upgrade, but I believe that only 1% of the people that will purchase a new or used vehicle will actually use (and have a need) 4 WD. It cost more to opertate and maintain these vehicles and people do not know this at all. I had a Ford Focus for 7 years, it was one of the best cars I ever drove in the winter time. Some common sense driving in bad weather and a set of good tires for the winter is all a person needs on a vehicle.

  21. Tina Fortune says:

    I have an Emergency Fund, paid off all the cc debt in 2009, and in 2010 I will be paying off the $7k balance on my 4 year old car. No excuses here! I’m determined to dump that debt!

    • Brad Chaffee says:

      I know you will do it too Tina! Congratulations on knocking those credit cards out of your life in 2009. I know that felt great!

      DUMP THAT DEBT TINA! WoooHooo! ๐Ÿ™‚

  22. Anne says:

    want an emergency fund in case there is a flood here in town again. Also , have to go and get my grandaughter due to both parents in the military.

  23. Richard Stooker says:

    Hi, Brad,

    Fantastic post, but you’re fighting an uphill battle.

    We’re creatures of emotions.

    We’re also products of 2 million years of evolution training us to solve today’s problems today — or we wouldn’t be alive to face tomrrow’s problems.

    Besides, next year’s problems will probably look a lot like this year’s problems.

    Therefore, what’s facing us now is what determines our emotions.

    Here in St Louis, winter snowfalls are ordinary events. We’re usually not buried in snow, but it’s normal. You know in November that you’re going to experience some snow before spring arrives.

    If you’re worried about the few times when you are confined to your house, you could stock up on food in November.

    So what happens whenever a significant snow storm is forecast — people flock to supermarkets to load up on food. I can’t remember the last time streets were closed down for more than a day but, by God, we have to be prepared for it so we don’t starve to death.

    All marketers know that it’s very difficult to “sell” prevention of problems. People want solutions to problems they’re feeling the pain of.

    That’s why fire and burglar alarms are generally hard sells — except when there’s been a major fire or burglary in the neighborhood. Then everybody’s worried.

    Macerich

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