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Bad times for a great purchase

According to the Bureau of Economic Analysis, consumer spending accounted for 68% of our nations economy.  

In an article, Consumer Spending Trends and Current Statistics on www.balance.com, it was reported that two-thirds of American's spending was on services like healthcare, one-quarter on non-durable goods like clothing and food and the rest on durable goods like cars and appliances.  The overall consumer spending rate for the first quarter of 2019 was $14.25 trillion.

While many of us find our budgets tapped on things like health insurance, groceries and revolving credit we are still drawn to those durable good purchases that can positively throw us off the proverbial financial edge.  Whether it's a new car, riding lawn mower, motorcycle or fridge, we want it.  Despite the damage incremental spending can do to our credit card debt, the big ticket purchases are perhaps the most damaging.

If you have marriage problems, have recently divorced or separated or have some other stressful situation in your life, you are at risk for making poor decisions related to spending.  It's best to get your emotions under control before making such decisions that affect more than this month's budget.

Why do big ticket items hurt if it accounts for a small portion of our overall spending?

The average consumer has a debt-to-income ratio that could average between 30-40%.  There are numerous services like insurance, food, fuel, utilities and other non-durable goods not factored into this figure.  They make-up for the majority of spending in the U.S., so most consumers have less excess income in their budgets to allow for large purchases.

Why are we drawn to making such purchases?

Much like any addiction, the payoff can be a chemical reaction.  Neurotransmitters in your brain are activated following such purchases.  Endorphins are released into your brain giving you a "buyer's high".  But, like many addictions, once that high wears off, the opposite feelings emerge.  Stress, anxiety and depression set in once you realize the magnitude of your decision.

Why is it wrong to purchase items following a difficult life event if it makes us feel better and it's within our budget?

Regardless of your financial fitness, life changing events in your life rarely lead to sound decision making.  If your marriage is in distress, new - expensive purchases can lead to additional problems. 

While in the process of a divorce, purchasing such items may be an area of contention if marital property, such as money from a joint bank account was used for the purchase.  Regardless if the purchase is deemed legally yours following the divorce, it can cause high tensions at the negotiating table.

I think I deserve this big purchase after my spouse's infidelity.

This can be a damaged self-esteem issue rather than just a spending issue.  If you reference something completely unrelated to a purchase as a reason to buy such an item, you probably shouldn't buy it.  You shouldn't need to buy something in order to feel better.   While some spending within your monthly budget following a difficult situation may be understandable and might actually help; big ticket purchases you consider as "deserved" are a red flag for bigger problems that your purchase only makes worse.

My ex was always focused on keeping a tight budget.  Now he has a new car and boat!  Is it wrong to want something too?

This is simple and complicated.  The simple question to ask yourself is whether you would want to splurge on something if not for your ex's recent spending habits or to improve your mood or emotional downturn.  If the answer is no, then your decision is being fueled by your emotions rather than need or real desire for whatever it is that you want to purchase.   

The complicated part is that you are no longer with someone who perhaps had you and your family on a very tight budget that didn't allow for your own personal preference of spending.  If your spending habits are more relaxed than when you were married, but still within your budget, then it may be okay to spend a little more than you have been accustomed to while married.  Be cautious though since this can open the door to continued increases in spending habits.  

Make sure any large purchases that need a loan do not require you to modify your everyday spending in order to make room in your budget.  Often, this may seem like a way to afford something that in fact you can't.  You may reduce your spending for a period of time, but as time goes on your monthly spending habits may resume and you could quickly find yourself living outside your means.

Sometimes the problem when a spouse makes purchases like these is that it represents his moving-on and without you.  It shows he has made some changes that he was unwilling to make when together.  If his purchases are out of character, know that eventually the reality of his emotional decision making will set-in and likely make things worse.  Instead of making the same mistake, hold steady your course of good financial decision making.  Long-term, individual happiness starts from within.  Make good changes in your life; improve yourself, career or health.  These are real changes that represent your ability to move forward and without your spouse.

The worse my financial situation gets, the more I seek something new.

This is a very common problem.  You have a shopping addiction that has caught up with you.  Overspending and failing to attain sufficient income led you into financial distress.  Now you crave the spending problem in order to deny you have a problem with making too little to support your lifestyle.  If you are still spending too much, you trick yourself into thinking the problem must not exist.  It also gives you the short-term euphoria that distracts you from your dismal financial situation.

You need to develop a budget immediately and discontinue purchases that are not absolutely necessary.   You should seek the help of a therapist or counselor who has experience with this type of addiction.  

-OurDMK.com



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