Spending some money on yourself when you want to celebrate small milestones or when you want to cheer yourself up is normal, but excessive behavior like this could become detrimental to your budget. Debts could accumulate, you could not save as much as you need to, and bills could be neglected over time. If you have fallen victim to one of many spending triggers like the one mentioned, there are ways to identify them, stop them and take control of your finances.

What is a spending trigger?

Spending triggers cause you to often unnecessarily spend money. These triggers can be in the form of a situation, emotion, place, or person. You may feel tempted to buy a new pair of shoes you’ve seen in an ad, stop at a restaurant after a long day at work, or browse online stores when you’re bored. These are all forms of spending triggers. An example of a common spending trigger is the annual Black Friday. Black Friday sales offer an overwhelming amount of specials on items you may or may not need. Black Friday can be beneficial, but it could damage your finances if you buy unnecessary items on credit.

 

Four main spending triggers to look out for:

1. Stress

Everyone experiences some form of stress and many people deal with this through shopping. Shopping, or spending money, can be a form of quick relief whether it be a pair of new shoes, an expensive meal, or a weekend away. Spoiling yourself and enjoying your hard-earned money is not a problem, but it becomes a problem when it gets out of hand. You should be careful when you feel tempted to spend money during or after stressful situations. It should be avoided if the purchase negatively affects your budget or savings.

2. Credit cards

Credit cards can be useful tools, especially in times of need or crisis. But, they can be a negative tool for some. A study by MIT found that people will often be willing to spend more on credit because they do not feel the immediate effects of the purchase as they would if it was paid in cash. If you do this, it’s time to stop, as this will hurt you in the future.

3. Retailer tactics

Retailers and marketers use tactics to get consumers to open their wallets. A great example is Black Friday, this sale offers a wide range of specials and bargains, but not all of these are actually saving you money. Before falling for retailer tactics, you should research to determine if it’s a real saving and if you actually need it before jumping on the trend.

4. Special events and holidays

People often spend more on special events and during holidays. It can make a big dent in your budget, whether it be gifts, clothing, or even decorations. If this happens once in a while, it won’t be the end of the world, but it can lead to bad consequences if it happens often. An example of this would be the festive season in South Africa. The festive season does not only bring Christmas and its expenses but also summer. Many South Africans splurge over the festive season as the end of the year approaches, and they want to relax and enjoy themselves. On top of this, Christmas also has many expenses like gifts and elaborate lunches. To avoid overspending, do your Christmas shopping throughout the year or set a budget before all the festivities to avoid the post-celebration guilt and overindulging to the point of affecting your savings.

 

Ways to take control of your finances:

No matter your financial situation, there is always a way to improve it. Here are a few things you can do with Kudough’s help:

1. Use the help of a credit coach.

Our Kudough credit coaches can provide you with insight into your credit score, debt, and what negatively and positively affects your finances. Our credit coaches can also help you understand your finances in order for you to make informed decisions during the trending sales and festive season so you don’t give in to spending triggers.

2. Take an online financial stress test

Kudough offers an online financial stress test to test your financial resilience. The test will figure out whether your financial health is strong enough for you to stay afloat during tough times. This will also determine whether you could financially survive a job loss, reduced hours, or an unexpected expense.  

3. Set goals on your profile

Kudough will select unique goals for you to improve your credit score and financial wellness over time. E.g. “high debt utilisation short-term accounts” aims to reduce your debt utilisation which in turn will reduce your monthly debt repayments. This will help you understand how you are using the credit available to you, and how to effectively manage it to benefit your debt levels, especially over the upcoming festive season.

4. Take a debt quiz

The debt quiz available on Kudough gives insight into your attitude toward your debt and how you view your finances in general. From this, you will understand your relationship with money and we provide guidance on how you can make improvements to day-to-day financial management. Completing your debt quiz prior to the upcoming sale and festive months may very well help you avoid spending triggers and make more informed decisions ending 2022 on a better financial foot.

 

The bottom line

Spending triggers come in various sizes, some being manageable and some devastating. These triggers can be emotional, physical, relational, or situational, but they can be taken control of. Trust in Kudough to help fix your credit score, understand your personal debt situation and help you take control of your financial future.

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