WEBVTT - 357. Why do we doomspend? 0:00:04.559 --> 0:00:07.960 Hello everybody. I'm Jemma Spake and welcome back to the 0:00:07.960 --> 0:00:11.280 Psychology of Your Twenties, the podcast where we talk through 0:00:11.320 --> 0:00:16.000 the biggest changes, moments, and transitions of our twenties and 0:00:16.040 --> 0:00:25.840 what they mean for our psychology. Hello everybody, Welcome back 0:00:25.880 --> 0:00:29.400 to the show. Welcome back to the podcast. New listeners, 0:00:29.520 --> 0:00:32.199 old listeners. Wherever you are in the world, it is 0:00:32.240 --> 0:00:34.400 so great to have you here. Back for another episode 0:00:34.520 --> 0:00:38.440 as we, of course break down the psychology of our twenties. Today, 0:00:38.640 --> 0:00:42.319 we are answering a question I have been having of 0:00:42.360 --> 0:00:47.559 myself recently, Why am I spending so much money? Specifically, 0:00:48.080 --> 0:00:52.720 why have I been using money to self sue, to 0:00:52.800 --> 0:00:57.160 feel better about my life, to take away bad feelings 0:00:57.200 --> 0:00:59.560 about the state of the world, probably more than I 0:00:59.560 --> 0:01:02.680 ever have. We're talking about a phenomena that has been 0:01:02.680 --> 0:01:07.319 popping up all over social media, in financial columns on TikTok, 0:01:07.640 --> 0:01:11.760 this concept of doom spending. I also think it's a 0:01:11.840 --> 0:01:14.880 great time to talk about money. With the holidays coming up. 0:01:15.319 --> 0:01:19.679 The urge and the desire to spend perhaps more than 0:01:19.680 --> 0:01:24.520 we have beyond our means is very very strong within us, 0:01:24.800 --> 0:01:28.320 and I want to talk about this specific type of compulsion, 0:01:28.360 --> 0:01:32.119 this specific reason why you and I, people in their 0:01:32.160 --> 0:01:36.560 twenties are spending all this money on things that maybe 0:01:36.560 --> 0:01:41.320 we don't really need. Doom spending is basically the desire 0:01:41.640 --> 0:01:45.200 or the impulse to spend money more rapidly and in 0:01:45.400 --> 0:01:50.080 larger sums in response to our anxiety and uncertainty about 0:01:50.080 --> 0:01:53.240 the future and about the world. It is this tendency 0:01:53.600 --> 0:01:56.880 to live in the now, to spend because the future 0:01:56.920 --> 0:01:59.960 is uncertain, to treat ourselves. It's the use of mine 0:02:00.680 --> 0:02:03.680 to manage our emotions. And you might be thinking, like, 0:02:03.760 --> 0:02:06.440 what is the problem with that? Like I work hard 0:02:06.440 --> 0:02:10.000 for my money, surely I should be, and you are 0:02:10.200 --> 0:02:14.000 allowed to spend it however I want. But there is 0:02:14.080 --> 0:02:17.120 a level where it actually gets out of control. It 0:02:17.160 --> 0:02:21.800 can begin to become a maladaptive coping mechanism, and it 0:02:21.840 --> 0:02:26.200 can actually in a way feed into our pessimism about 0:02:26.200 --> 0:02:28.840 the future in a way that is a little bit unhealthy. Also, 0:02:29.240 --> 0:02:32.880 you know, it takes away from our ability to plan 0:02:33.040 --> 0:02:39.040 financially and to save and to achieve you know, financial freedom, 0:02:39.200 --> 0:02:43.320 financial sustainability, to have long term financial goals. And although 0:02:43.360 --> 0:02:45.480 we may not be thinking about that in our early 0:02:45.480 --> 0:02:47.880 twenties or in our twenties at all, it is still 0:02:48.280 --> 0:02:51.200 an important conversation. So in this episode, we're going to 0:02:51.240 --> 0:02:54.600 talk about what doom spending actually is, why we do it, 0:02:55.080 --> 0:02:57.800 what it says about the times we're living in, and 0:02:57.919 --> 0:03:01.560 how to get control of about how you spend money 0:03:02.040 --> 0:03:08.080 in a really healthy gentle and I think sustainable way. 0:03:08.680 --> 0:03:16.720 Without further ado, let's get into it. Let's begin with 0:03:16.800 --> 0:03:18.840 the basics. We always do this at the start of 0:03:18.880 --> 0:03:21.480 every episode. I feel like a broken record, but just 0:03:21.639 --> 0:03:24.320 so we have a clear definition of doom spending. What 0:03:24.360 --> 0:03:28.680 I'm talking about is not just spending because you feel 0:03:28.800 --> 0:03:32.320 like it. I'm talking about the use of spending often 0:03:32.840 --> 0:03:37.360 that's impulsive as a way to calm a sense of 0:03:37.440 --> 0:03:43.480 uncertainty or a threat. It is an emotional coping mechanism. 0:03:43.520 --> 0:03:46.120 It's not buying things that you actually need. It's not 0:03:46.200 --> 0:03:48.800 buying things that you know you want and you feel 0:03:48.840 --> 0:03:53.200 like you should treat yourself to. It is buying because 0:03:53.600 --> 0:03:56.480 the future doesn't feel like it's coming, and so you 0:03:56.520 --> 0:03:59.200 want to live in the now and a way to 0:03:59.240 --> 0:04:02.320 feel better about perhaps the future not coming, which, by 0:04:02.320 --> 0:04:06.560 the way, it is, is to you know, spend and 0:04:06.640 --> 0:04:09.640 to fill your wardrobe and to get the dopamine of 0:04:09.800 --> 0:04:15.040 small purchases. To give this some historical perspective, this is 0:04:15.080 --> 0:04:18.800 actually nothing new. It might feel this way, but we 0:04:18.800 --> 0:04:21.640 are actually not the first generation to live through scary times. 0:04:21.640 --> 0:04:25.440 We probably won't be the last, and economic spending does 0:04:25.640 --> 0:04:30.839 increase in times of geopolitical uncertainty. There's also other interesting 0:04:30.960 --> 0:04:35.200 cases of how money responds to our emotions in uncertain times, 0:04:35.480 --> 0:04:38.920 some whacking examples. One that we found was that in 0:04:38.960 --> 0:04:43.280 the eighteen hundreds there was this Baptist preacher named William Miller, 0:04:43.720 --> 0:04:46.120 and he had this huge following, and he was like, 0:04:46.160 --> 0:04:49.120 guess what, Jesus is going to return in eighteen forty four. 0:04:49.400 --> 0:04:51.800 The world's going to end. The chosen few are going 0:04:51.800 --> 0:04:55.480 to ascend into heaven, and so let's live it up. 0:04:56.040 --> 0:04:59.080 You know, take out loans, build your dream house, buy 0:04:59.200 --> 0:05:01.599 nice dinners, buy the car you want. I don't know 0:05:01.600 --> 0:05:04.400 if they had cars, and the eighteen hundred they definitely didn't, 0:05:04.640 --> 0:05:06.200 but you know what I mean, Like they were spending 0:05:06.240 --> 0:05:09.000 all this money so lavishly because they didn't think they 0:05:09.000 --> 0:05:11.359 would have to repay their debts. And then you know, 0:05:11.440 --> 0:05:13.960 the logic was that the apocalypse was so near. Why 0:05:14.000 --> 0:05:16.920 not have fun now? And then the apocalypse didn't happen 0:05:17.120 --> 0:05:22.400 and this whole community essentially went bankrupt. So we have 0:05:22.520 --> 0:05:25.560 seen examples of this in the past. You know. Now, 0:05:25.760 --> 0:05:30.920 obviously it's not a religious apocalypse, it's climate change, it's inflation, 0:05:31.160 --> 0:05:34.280 it's AI, it's the twenty four hour news cycle. But 0:05:34.400 --> 0:05:38.040 the psychological pattern is the same. When the world feels unstable, 0:05:38.279 --> 0:05:42.159 we turned to consumption as a way of asserting control 0:05:42.320 --> 0:05:44.800 because spending money is one of the only things that 0:05:45.680 --> 0:05:49.080 we can do that feels like it does something or 0:05:49.200 --> 0:05:55.919 gives us something back, and that's doom spending. Why is 0:05:55.960 --> 0:06:01.240 that the case? Why does spending money kind of feeling well? 0:06:01.240 --> 0:06:04.560 When we spend money? Basically, our dopamine system is activated. 0:06:04.560 --> 0:06:06.920 I feel like you guys already know that. But it's 0:06:06.920 --> 0:06:09.920 not just when we get the thing. It's when we 0:06:10.240 --> 0:06:13.280 see something we like, when we anticipate a purchase, when 0:06:13.320 --> 0:06:16.480 we click check out, when we're waiting for the parcel 0:06:16.560 --> 0:06:20.000 to arrive, when we go and collect it. Every single 0:06:20.080 --> 0:06:24.039 element of this process triggers the release of dopamine, and 0:06:24.080 --> 0:06:28.120 at all those various touch points, our mood is briefly 0:06:28.440 --> 0:06:33.600 improved and our stress is briefly lowered over time, we 0:06:33.720 --> 0:06:39.080 learn through association that we feel better from spending. We 0:06:39.120 --> 0:06:43.440 feel nice, and also it's accessible to us. We get 0:06:43.520 --> 0:06:46.599 something in return, we get a good, we get an item. 0:06:47.000 --> 0:06:52.440 So psychologically, spending functions like an emotional regulation strategy, much 0:06:52.520 --> 0:06:56.720 like eating comfort food, much like scrolling social media. In 0:06:56.760 --> 0:06:59.960 cognitive behavioral terms, if we want to go really psychological, 0:07:00.360 --> 0:07:03.480 it is what we call negative reinforcement. The behavior, the 0:07:03.520 --> 0:07:08.960 act of buying, of shopping removes distress, and that's pleasurable, 0:07:09.320 --> 0:07:12.200 and so it's more likely to be repeated. So the 0:07:12.600 --> 0:07:16.120 thing that we really need to note is that doom spending, yes, 0:07:16.280 --> 0:07:21.640 is tied up in materialism. It's not necessarily about materialism. 0:07:22.000 --> 0:07:28.640 It's about fear. It's about comfort, it's about control, it's 0:07:28.680 --> 0:07:36.720 about feeling safe. Almost second, the evidence does really confirm 0:07:37.080 --> 0:07:39.680 it's not just that, you know, we're a generation that 0:07:39.720 --> 0:07:42.920 has more money. It's not just that shopping is more accessible, 0:07:43.120 --> 0:07:46.119 that delivery like is more accessible, that things come faster. 0:07:47.000 --> 0:07:51.360 Political and global context is driving over spending. Studies and 0:07:51.440 --> 0:07:56.160 financial reports show that impulse spending has rapidly increased since 0:07:56.200 --> 0:08:00.120 the pandemic, and especially during the pandemic. That is when 0:08:00.160 --> 0:08:02.520 a lot of these habits were triggered. You know, online 0:08:02.560 --> 0:08:06.200 shopping was one of the very few joys we seemed 0:08:06.200 --> 0:08:11.480 to have control over. I was so broke during the pandemic, 0:08:12.240 --> 0:08:15.760 so broke, and I used to spend one hundred dollars. 0:08:15.760 --> 0:08:17.200 I remember, I had like a little bit of money 0:08:17.240 --> 0:08:20.120 in my bank account from my restaurant job that I 0:08:20.200 --> 0:08:23.680 was obviously I didn't have, And I would spend like 0:08:23.720 --> 0:08:26.520 one one hundred dollars on something and then I would 0:08:26.520 --> 0:08:28.600 return it, and then I would buy something else and 0:08:28.640 --> 0:08:31.600 then I would return it. I think I recycled that 0:08:31.640 --> 0:08:35.800 one hundred dollars like five times. I even remember, like 0:08:35.840 --> 0:08:40.000 I bought this tartan puffer jacket. I don't know why, 0:08:40.240 --> 0:08:42.720 Like there was no weather that required me to buy that, 0:08:43.240 --> 0:08:44.960 and then I returned it. And then I bought like 0:08:45.120 --> 0:08:48.600 basically something exactly the same and returned that because of 0:08:48.640 --> 0:08:51.120 the dopamine, And this is where a lot of us 0:08:51.200 --> 0:08:54.280 learnt this habit. According to twenty twenty three data from 0:08:54.320 --> 0:08:58.199 the Federal Reserve Bank of New York, credit card balances 0:08:58.200 --> 0:09:02.440 in the US rose seventeen percent between twenty twenty and 0:09:02.559 --> 0:09:06.920 twenty twenty two. That is the sharpest increase in decades. 0:09:07.360 --> 0:09:10.760 Similar things happened in a lot of other countries where 0:09:10.840 --> 0:09:13.960 credit card data is like readily available, So in the UK, 0:09:14.120 --> 0:09:17.760 in Australia, across Europe, in Canada, across all these countries, 0:09:17.800 --> 0:09:22.160 we could see this trend. Psychologists who are studying still 0:09:22.200 --> 0:09:26.640 studying post pandemic consumer behavior. That sound kind of sounds 0:09:26.640 --> 0:09:29.920 like a tongue twister, but post pandemic consumer behavior. Note 0:09:29.920 --> 0:09:37.760 that collective trauma, economic precarity, social isolation. Basically, what it's 0:09:37.800 --> 0:09:44.720 all created are these shorter planning horizons. The future feels bleak, 0:09:44.760 --> 0:09:49.520 it feels uncertain, and so we tend to not think 0:09:49.520 --> 0:09:53.080 that it's going to happen. When you ask people in 0:09:53.120 --> 0:09:56.800 their twenties or in their thirties, people our age, Hey, like, 0:09:56.880 --> 0:10:00.800 how far do you think in the future. For me, 0:10:01.200 --> 0:10:07.360 it's probably only six months, And that's not normal, Like 0:10:07.400 --> 0:10:09.920 you should be able to plan and think about your 0:10:09.920 --> 0:10:11.880 life long term. But I think the state of the 0:10:11.880 --> 0:10:16.320 world means that it's really hard to Everything is changing 0:10:16.360 --> 0:10:18.560 so far. It's like you just can't imagine the world 0:10:18.880 --> 0:10:21.600 beyond six months. So if you can't imagine the world 0:10:21.679 --> 0:10:24.920 in six months, why are you going to save for 0:10:25.000 --> 0:10:28.720 a financial goal that's ten years away, like buying a house. 0:10:29.440 --> 0:10:31.200 Why are you going to save for a financial goal 0:10:31.320 --> 0:10:35.480 that's fifty years away or forty years away, like retirement. 0:10:35.800 --> 0:10:39.600 The appeal of this immediate gratification in the face of 0:10:39.640 --> 0:10:43.840 like really scary stuff often overshadows, you know, a more 0:10:43.960 --> 0:10:48.520 rational decision making process that is reliant on us being 0:10:48.600 --> 0:10:54.120 able to imagine a future with us in it. Another explanation, 0:10:54.840 --> 0:10:58.440 spending money is just a nice distraction. When you're thinking 0:10:58.480 --> 0:11:02.400 about when you're hal's going to arrive, When you're thinking 0:11:02.400 --> 0:11:05.320 about how this next outfit is going to change your life, 0:11:05.920 --> 0:11:10.040 you're not thinking about everything else that's going wrong. And 0:11:10.080 --> 0:11:15.480 this really aligns with like the infamous little treat narrative. Now, 0:11:15.559 --> 0:11:17.840 I'm a big fan of this. I love a little treat. 0:11:18.160 --> 0:11:21.480 I'm a big believer in little treats. It's not inherently 0:11:21.520 --> 0:11:25.040 bad to treat yourself, and I actually think it's, you know, 0:11:25.040 --> 0:11:28.200 an important part of self care and self comfort. But 0:11:28.800 --> 0:11:34.920 when treat culture turns into habitual, high spend behavior, especially 0:11:34.920 --> 0:11:38.760 when it's triggered by fear or anxiety, that's a coping mechanism, 0:11:39.160 --> 0:11:43.840 not a reward. And add that to the fact that nowadays, 0:11:43.960 --> 0:11:49.520 like companies and the global economy and you know, big 0:11:49.559 --> 0:11:53.240 brands are taking advantage of that. Is it really about 0:11:53.360 --> 0:11:57.600 us or is it being manipulated for profit? The other 0:11:57.679 --> 0:12:01.280 day I was Insidney driving to the airport and I 0:12:01.320 --> 0:12:05.920 saw this massive billboard that was like from McDonald's and 0:12:05.960 --> 0:12:10.280 it said existing question mark, you deserve a little tree. 0:12:10.559 --> 0:12:14.600 That that's a marketing con like. That is not self care. 0:12:14.679 --> 0:12:17.160 That is McDonald's trying to get you to buy the 0:12:17.200 --> 0:12:21.520 thing that they have designed for you, to spend money 0:12:21.920 --> 0:12:26.839 to fill their pockets. And especially nowadays, when we are 0:12:26.960 --> 0:12:31.440 bombarded with targeted ads, we are streamlined into buy now 0:12:31.520 --> 0:12:35.200 buttons and limited time offers and sales. I think the 0:12:35.240 --> 0:12:38.600 shift from reward to regulation, it can happen really subtly 0:12:38.640 --> 0:12:41.120 and is impacting a lot of us. It's impacting me 0:12:41.679 --> 0:12:44.400 for sure. You know, there really is something to be 0:12:44.400 --> 0:12:47.319 said about doom spending, the fact that so many people 0:12:47.320 --> 0:12:50.360 in their twenties are spending more money than they probably have, 0:12:51.280 --> 0:12:55.000 and the role of technology and social media. Think about 0:12:55.040 --> 0:12:59.400 the last time you scrolled your Instagram feed. You will 0:12:59.400 --> 0:13:03.440 see news of genocide, news of political unrest, news of 0:13:03.480 --> 0:13:07.880 climate disasters, and then what happens after that. Add for 0:13:07.920 --> 0:13:11.400 a designer bag, we can get away pair of sneakers, 0:13:11.800 --> 0:13:15.240 phone case, sweater, t shirt, buy now, Buy now, Buy now. 0:13:15.600 --> 0:13:19.520 That's emotional whiplash. You are going from panic and despair 0:13:20.160 --> 0:13:23.800 to pleasure and intrigue. And that is not accidental. It's 0:13:23.840 --> 0:13:27.800 engineered social media platforms, and there have been articles on this. 0:13:27.880 --> 0:13:30.000 There have been people who have come out who were 0:13:30.040 --> 0:13:32.160 involved in making these systems, who have come out and said, 0:13:32.160 --> 0:13:35.080 we designed it this way. They are made to monetize 0:13:35.120 --> 0:13:38.880 your attention because when ads make money, they make money, 0:13:38.920 --> 0:13:42.280 and the way ads make money is if the site 0:13:42.679 --> 0:13:46.200 holds your attention long enough to trigger an emotion that 0:13:46.240 --> 0:13:50.960 will produce a sale. Fear, outrage, sadness, whatever it is. 0:13:51.440 --> 0:13:55.760 These all heightened arousal. They keep us scrolling more and more. 0:13:55.800 --> 0:13:58.480 And once you're in that heightened emotional state, once your 0:13:58.520 --> 0:14:03.920 defenses are lowered, once the world feels terrible, you're more suggestible, 0:14:04.160 --> 0:14:07.439 you're more reward seeking, you're more likely to act impulsively. 0:14:08.480 --> 0:14:11.840 The discomfort we feel when we flip between threat and 0:14:11.920 --> 0:14:16.880 reward requires an antidote. We want a solution, We want 0:14:16.880 --> 0:14:21.240 to feel better, and then this algorithm these social media platforms, 0:14:21.640 --> 0:14:24.560 they serve it right up to us. A twenty twenty 0:14:24.560 --> 0:14:28.160 four study by researchers in Indonesia found that exposure to 0:14:28.240 --> 0:14:33.840 emotionally charged content significantly increased impulse buying in people in 0:14:33.880 --> 0:14:39.680 their twenties in young adults. Essentially, after being emotionally activated, 0:14:40.160 --> 0:14:43.680 people were more likely to buy stuff and when they 0:14:43.680 --> 0:14:48.720 were asked why, oftentimes they couldn't really explain it. So 0:14:48.880 --> 0:14:52.400 this is when spending because you want something, spending because 0:14:52.400 --> 0:14:55.560 you do deserve a little treat, and spending because you 0:14:55.920 --> 0:14:58.040 don't really know why you're spending, and because it's a 0:14:58.080 --> 0:15:01.240 form of coping and a mo regulation. This is when 0:15:01.240 --> 0:15:06.160 the line really begins to blur and what began as 0:15:06.520 --> 0:15:09.840 harmless distraction as actually feeling a need like you do 0:15:10.040 --> 0:15:12.200 need clothes and you do need things in your life, 0:15:13.040 --> 0:15:18.040 can quietly turn into like a routine, an addiction, a 0:15:18.080 --> 0:15:22.120 really toxic habit. So let's talk about the signs that 0:15:22.200 --> 0:15:26.840 your doom spending might be going too far and what 0:15:26.920 --> 0:15:34.760 you can do about it after this short break, So 0:15:34.800 --> 0:15:38.680 how do you know when treating yourself has tipped into 0:15:38.800 --> 0:15:42.120 something else? Entirely most of us don't wake up one 0:15:42.160 --> 0:15:44.840 morning and think like, oh no, I have developed an 0:15:44.960 --> 0:15:48.200 unhealthy coping mechanism. What will I do about this? Like 0:15:48.520 --> 0:15:52.040 it really creeps in slowly, it's disguised again is as 0:15:52.120 --> 0:15:56.880 fun as keeping up with trends. But here are the 0:15:56.920 --> 0:15:59.600 signs that it's gone a little bit too far. Firstly, 0:15:59.600 --> 0:16:03.120 you notice that your biggest shopping days aren't actually when 0:16:03.160 --> 0:16:07.680 you need anything, aren't when you've just gotten paid, aren't 0:16:07.680 --> 0:16:11.200 when you're celebrating. They actually occur when you're anxious, when 0:16:11.240 --> 0:16:15.080 you're overwhelmed, or you're sad, Especially if you are shopping 0:16:15.080 --> 0:16:19.680 a lot at night, big red flag inhibitions are lowered. 0:16:20.120 --> 0:16:22.720 Often that's when our biggest feelings come about. We're tied 0:16:22.760 --> 0:16:26.840 from the day. Shopping is the band aid. Secondly, this 0:16:26.880 --> 0:16:29.840 one's the obvious one. You're spending beyond your means, and 0:16:29.880 --> 0:16:32.800 you're seriously spending beyond your means. You know. A huge 0:16:32.800 --> 0:16:35.960 thing that has boomed in recent years is these buy now, 0:16:36.040 --> 0:16:39.880 pay later, buy and for delayed payment options. Even using 0:16:39.880 --> 0:16:42.920 credit cards to pay for small things that aren't necessities 0:16:42.960 --> 0:16:46.120 also comes under this. Now, I don't think these kinds 0:16:46.160 --> 0:16:49.000 of options are inherently bad at all. To be honest, 0:16:49.080 --> 0:16:53.000 I use Klana. I use like the PayPal for in 0:16:53.360 --> 0:16:55.360 I don't know what it is like the for payment things, 0:16:56.040 --> 0:16:58.680 especially because I don't get paid regularly. It like helps 0:16:58.680 --> 0:17:01.000 me break up my budget. And I used to use 0:17:01.000 --> 0:17:03.080 it when I was working as a consultant and I 0:17:03.120 --> 0:17:05.719 got paid monthly, just to kind of like make the 0:17:05.720 --> 0:17:09.159 things I was repaying for weekly and monthly as well. 0:17:09.440 --> 0:17:13.359 I think they offer flexibility, but they also allow you 0:17:14.040 --> 0:17:16.879 to go a little bit too far. Behavioral economists have 0:17:17.000 --> 0:17:22.960 highlighted that separating the payment from the consumption reduces what 0:17:23.000 --> 0:17:26.359 we call the pain of paying. This is a concept 0:17:26.600 --> 0:17:30.159 that was coined in the nineties and the pain of 0:17:30.280 --> 0:17:33.040 paying is an important part of the buying process and 0:17:33.200 --> 0:17:37.920 is basically the psychological discomfort that makes us hesitate before 0:17:37.920 --> 0:17:42.879 a purchase. When we use later pay options, it delays 0:17:43.240 --> 0:17:46.199 or disguises the payment so our brain feels like it 0:17:46.240 --> 0:17:50.480 can experience all of the rewards, a none, or a 0:17:50.600 --> 0:17:54.119 fraction of the cost until later on. That is the danger, 0:17:54.119 --> 0:17:57.399 and again they're not necessarily bad, they're not all bad, 0:17:57.800 --> 0:18:00.280 but what it does have the potential to slip into 0:18:00.600 --> 0:18:04.720 is chasing payments slipping into debt if they are used 0:18:04.720 --> 0:18:08.240 for things to pay for things that are beyond our means. 0:18:09.080 --> 0:18:11.440 Even if you want to use these platforms to pay 0:18:11.480 --> 0:18:14.000 for your shopping, you have to ensure that you actually 0:18:14.040 --> 0:18:17.080 have the money there to use it if you needed to. 0:18:17.720 --> 0:18:20.200 And that's how you prevent the cost from stacking up 0:18:20.240 --> 0:18:22.920 when you have no other way to pay for these 0:18:23.160 --> 0:18:26.960 or when the payments are due. I think something really 0:18:27.000 --> 0:18:30.080 related to this that shows doom spending has gone too 0:18:30.119 --> 0:18:33.840 far for you is if you found yourself deliberately ignoring 0:18:33.840 --> 0:18:38.199 bank statements, deliberately ignoring notifications, feeling a sense of dread 0:18:38.280 --> 0:18:43.080 when you open your banking app. Financial avoidance is a 0:18:43.200 --> 0:18:46.439 huge red flag and a huge coping mechanism that a 0:18:46.480 --> 0:18:50.080 lot of us in our twenties have because your brain 0:18:50.160 --> 0:18:51.720 is trying to shield you from all the fear and 0:18:51.760 --> 0:18:55.160 shame and the guilt and just keep all the good stuff, 0:18:55.400 --> 0:18:58.199 keep all the purchases, keep all the dopamine. But that 0:18:58.400 --> 0:19:02.520 cycle actually makes get worse. You're no longer aware of 0:19:02.520 --> 0:19:04.240 how much is coming in and out of your account 0:19:04.240 --> 0:19:06.640 each week. You don't know how much you really need 0:19:06.640 --> 0:19:09.919 to live. At first, it's an easier option to just 0:19:10.040 --> 0:19:14.080 not look, but I promise you. I have done that 0:19:14.400 --> 0:19:16.600 when I Again, when I was working as a consultant, 0:19:16.880 --> 0:19:22.359 I had terrible financial habits, which is ironic. Having financial accountability, 0:19:22.400 --> 0:19:25.320 even if you really have to stare your shopping and 0:19:25.359 --> 0:19:28.640 you're spending straight in the face, is so much better 0:19:28.640 --> 0:19:32.520 for you long term. So if you have recognized this 0:19:32.600 --> 0:19:36.520 pattern in yourself, how do you stop now? I'm not 0:19:36.560 --> 0:19:40.800 gonna say like, swear off spending altogether. Go cold turkey 0:19:41.760 --> 0:19:45.080 never works. I don't think it's realistic. It's like telling 0:19:45.119 --> 0:19:47.359 yourself never to eat sugar again. You can eat sugar 0:19:47.359 --> 0:19:51.680 by Lake Tuesday instead. The goal is to retrain your 0:19:51.680 --> 0:19:56.960 brain to replace emotional spending with more sustainable forms of 0:19:57.000 --> 0:20:00.679 regulation and of control. So here are a few tips 0:20:00.680 --> 0:20:03.720 of like how to start how to do that? First, 0:20:04.359 --> 0:20:08.159 let's flip it around. If doom spending is about spending 0:20:08.280 --> 0:20:12.880 because the future feels uncertain, doom saving is about saving 0:20:13.080 --> 0:20:16.800 because it feels uncertain. It's like a little way to 0:20:16.960 --> 0:20:20.800 create a sense of safety and a sense of the 0:20:20.840 --> 0:20:25.000 future in a very small, very tangible way. You don't 0:20:25.000 --> 0:20:28.760 have to start with huge amounts. Actually, research always shows 0:20:28.840 --> 0:20:33.840 us small, consistent you know, saving goals is key. Five 0:20:34.000 --> 0:20:37.840 or ten dollars a week. It actually increases your sense 0:20:38.040 --> 0:20:40.800 of confidence in your own ability to manage money, but 0:20:40.880 --> 0:20:44.280 also feelings of psychological well being and feelings of self trust, 0:20:44.480 --> 0:20:47.399 like hey, like, I'm proud of this. I'm I'm taking 0:20:47.440 --> 0:20:49.440 this thing that I earned, that I worked hard for, 0:20:49.720 --> 0:20:52.680 and I'm building something for my future, And the very 0:20:52.720 --> 0:20:55.679 fact that it's there has this weird reverse way of 0:20:56.080 --> 0:20:57.800 telling you that there will be a future, which is 0:20:57.840 --> 0:21:00.760 really what we're trying to get down to at the 0:21:00.840 --> 0:21:04.680 end of the day. Behavioral economist Richard Thaylor. He called 0:21:04.680 --> 0:21:10.960 this approach mental accounting, reframing savings not as deprivation but 0:21:11.080 --> 0:21:14.360 as a reward, as an act of self care, as 0:21:14.400 --> 0:21:19.880 an act of self trust, as an act of yeah, 0:21:19.920 --> 0:21:23.000 future investment, like you're saving for the life that one 0:21:23.040 --> 0:21:25.160 day you're going to really love and enjoy. And this 0:21:25.240 --> 0:21:29.000 really counters the idea that we explored earlier of temporal 0:21:29.240 --> 0:21:33.640 discounting or present bias, because the future feels are so uncertain. 0:21:33.680 --> 0:21:35.919 You know, we spend more money now, but if we 0:21:36.000 --> 0:21:39.760 save more, the possibilities for the future, the trip, we're 0:21:39.800 --> 0:21:43.600 saving for the dream house. They expand I found this 0:21:43.760 --> 0:21:47.399 incredibly interesting article published in twenty eleven in the Journal 0:21:47.440 --> 0:21:52.880 of Marketing Research that found across four studies, participants who 0:21:52.880 --> 0:21:59.160 were basically asked to interact with realistic, computer generated simulations 0:21:59.200 --> 0:22:05.639 of their future using virtual technology were more likely to 0:22:06.080 --> 0:22:08.800 accept a larger sum of money down the line. So, 0:22:09.600 --> 0:22:12.080 just to like roll that back, they got all these people, 0:22:12.440 --> 0:22:16.439 these participants, and they put them in these simulations. They 0:22:16.520 --> 0:22:19.840 let them create these simulations of like really beautiful future 0:22:20.480 --> 0:22:24.040 and they were really realistic. And then they said, oh, hey, 0:22:24.080 --> 0:22:27.680 by the way, you actually get paid for this. Would 0:22:27.720 --> 0:22:30.399 you want fifty dollars now or do it mean to 0:22:30.440 --> 0:22:32.439 give you one hundred dollars at the end of the 0:22:32.520 --> 0:22:36.240 term or one hundred dollars in three months. And the 0:22:36.280 --> 0:22:39.240 people who had seen these really positive versions of themselves 0:22:39.720 --> 0:22:43.240 and whose futures seemed really happy and bright, they wanted 0:22:43.280 --> 0:22:47.919 to wait. In all cases, they wanted to accept the 0:22:48.280 --> 0:22:52.560 later monetary reward over the immediate one. And I just 0:22:52.600 --> 0:22:55.280 think I love this study. It really brilliantly demonstrates that 0:22:55.840 --> 0:23:00.480 keeping that future self in mind, forcing yourself to really 0:23:00.520 --> 0:23:04.280 imagine them when making these financial decisions when going to 0:23:04.400 --> 0:23:09.400 buy stuff, goes a long way. Next, the next tip 0:23:09.440 --> 0:23:13.320 that we can really do for ourselves is just reallocate 0:23:13.359 --> 0:23:18.080 where your money goes. Psychological research consistently finds that spending 0:23:18.080 --> 0:23:21.840 on experiences, rather than material goods like a new top 0:23:21.960 --> 0:23:25.080 or a new pair of shoes, leads to greater and 0:23:25.200 --> 0:23:32.320 longer lasting happiness. Why Because experiences connect to identity, and 0:23:32.440 --> 0:23:38.000 experiences connect to relationships, and experiences connect to a deep 0:23:38.560 --> 0:23:42.240 sense of memory and sense of self and sense of interconnectedness. 0:23:42.600 --> 0:23:47.600 Spending on experiences as well build stories, gives you stories, 0:23:47.720 --> 0:23:51.920 gives you memories that make you excited for future memories, 0:23:51.960 --> 0:23:54.000 and they give you something that's going to last a 0:23:54.040 --> 0:23:57.160 lot longer than plastic and a lot longer than clutter. 0:23:57.600 --> 0:24:00.679 And Like, don't get me wrong, I love things. I 0:24:00.720 --> 0:24:03.399 love clothes, I love buying stuff I have. I have 0:24:03.480 --> 0:24:05.400 so many purchases that are just stupid that I still 0:24:05.440 --> 0:24:09.520 really really value. But are they going to be the 0:24:09.560 --> 0:24:14.480 things I take with me? No? I literally can't. But 0:24:15.359 --> 0:24:19.240 buying the concert ticket, doing the day trip, spending a 0:24:19.280 --> 0:24:21.800 little bit of extra money so that we can get 0:24:21.800 --> 0:24:25.320 a nice place on the girl's weekend, Like, those things 0:24:25.400 --> 0:24:29.080 really anchor me, and they anchor us in memory and 0:24:29.200 --> 0:24:32.280 in belonging, and they are a great, great way to 0:24:32.320 --> 0:24:36.600 form novel and exciting experiences that just makes life worth 0:24:37.280 --> 0:24:41.440 and feel worth living. Another way, I'm full of tips today. 0:24:41.480 --> 0:24:44.080 Another way to begin reallocating your spending that I do 0:24:44.880 --> 0:24:46.960 is I create, and I have created a twenty four 0:24:46.960 --> 0:24:49.359 hour rule. And friends of mine have seen me use this. 0:24:49.480 --> 0:24:52.399 They can tell you it works. When I see something 0:24:52.440 --> 0:24:55.280 I want, I do not buy it right away. I'm 0:24:55.320 --> 0:24:58.840 allowed to buy it eventually, but I have to wait 0:24:59.160 --> 0:25:02.359 minimum to twenty for hours. I get my notes app 0:25:02.480 --> 0:25:05.160 up on my phone. I write it down. I write 0:25:05.200 --> 0:25:08.440 down the item, the price, the date I initially wanted 0:25:08.440 --> 0:25:12.600 to buy it. Then I just let it sit. This 0:25:12.960 --> 0:25:19.520 short delay activates what psychologists call system to thinking, that slower, 0:25:19.760 --> 0:25:23.359 more deliberate part of your brain that handles logic and 0:25:23.400 --> 0:25:27.200 that handles long term reasoning. When you give the impulsive 0:25:27.240 --> 0:25:31.080 part of your brain pause, this system too. This second 0:25:31.080 --> 0:25:35.600 system locks in and allows you to spend better align 0:25:35.640 --> 0:25:38.960 it's been in, more alignment with your values. Most of 0:25:39.000 --> 0:25:42.600 the time. You will find that the desire fades once 0:25:42.680 --> 0:25:46.760 the emotional charge passes, and if it doesn't, then you 0:25:46.800 --> 0:25:49.640