Psychology of Spending Program Recap

Thank you to Jaime Gangone from the Credit Union of New Jersey for looking at underlying motivations for why we buy what we buy and how that can affect our overall financial health.  Understanding why we spend can be just as, if not more important than identifying what we spend our money on.  The CUNJ covered 8 possible reasons that influence our spending decisions:

  1. The Role of Advertising – using emotional appeals or providing product information for comparison motivates us buy or consider purchasing that product or service.
  2. Keeping Up with the Joneses – we all want to have nice things and we can justify our spending habits by comparing what we have to what others (family, friends, celebrities) have in order to keep up an appearance.
  3. Spending Habits – We become complacent in our spending habits, even if those spending habits are no longer viable in our changing financial situation, such as buying a $5 cup of gourmet coffee every day before work instead of making our own at home.
  4. Impulse Buying – Being impulsive is part of human nature and companies and retailers use this to their advantage, such as having shelves of candy at the cash register or having to walk the back of the store to reach the pharmacy; the more products that are in front of us as we try to get to what we want, the more likely we will impulsively buy something else.
  5. Bargain Hunting – Just because something is on sale or for a great deal does not mean that we must have that item.  While it feels great to save money, if you did not have a use for the item nor were planning on buying the item anyways, you may end up spending more money on things that you don’t really need.
  6. Retail Therapy – For some people, going out shopping, and by extension finding great deals, makes one feel better and can distract from issues or problems in one’s life.  Using shopping as a therapy or escape can quickly put us out of our budget and lead to other emotional and financial issues.
  7. Money As Love – We all want to show our love and we commonly do that by buying things, especially things that are only temporary such as flowers or food.  While periodically spending money on the ones we love to show our commitment or appreciation is perfectly fine, using the amount of money we spend or how often we spend can easily exhaust our finances.
  8. I’ll Worry About Tomorrow Tomorrow – Many people tend to focus on the here and now in their purchasing habits rather than days, months, or years in the future.  A perfect example is using credit cards or loans to buy things immediately and failing to realize that by not paying off those expenditures immediately, they will cost more in the long-term due to interest that could be better spent on things such as paying down other debt or saving for a vacation or down payment on a house.

For a copy of the handout from the presentation, please visit  To view the recording of the webinar, please visit

About Andrew Dauphinee

Education and learning are passions of mine. Lifelong learning is a core part of who I am and I strive to pass that desire for information on to everyone I meet. As the Instruction and Outreach Librarian, it is my goal to provide quality, informative, and relevant programming to meet the diverse needs of our patrons. Please contact me regarding programming at