Binge Spending

3 minute read

A quick Google search tells me that I either may have just made that term up, or I have no idea what I’m talking about. Either way, I’m sticking with it. I’m not talking about Compulsive Buying Disorder (CBD), which is a mental health issue that can wreak havoc on your financial situation and that I’m not qualified to discuss. I’m talking about something that I’ve witnessed which is (hopefully) less impactful on your financial situation than CBD but could still have a negative effect.

When I think about the term “binge” I immediately think of binge eating, binge Netflix-ing, or binge drinking. When I use the term “binge spending”, this is exactly what I mean – spending a lot of money in a short amount of time.

Binge Eating

I compare this to a diet. You’re doing well on your diet for a couple of weeks when one of your friends asks you to go out for pizza. You think, “Okay, I’ll do really well this week and save some calories for pizza and maybe a couple of beers Friday night with friends.” When Friday night comes around, you’ve done well all week and have set yourself up so you can enjoy some pizza and a couple of beers with your friends without any guilt.

But, by the time you’re done you’ve had a whole pizza by yourself and enough beer to drown a whale.

Then, the next day you think, “I already messed up yesterday, and I feel bad about it, so cheating again today isn’t going to be a big deal.” You’re mentally fatigued from all the restriction. Now, you’ve got some momentum going down the wrong path and you’re more likely to make poor decisions again. I’ve seen it happen to myself and to others.

“Just this once” turns into a habit.

Restriction Can Cause Bingeing

This is exactly why traditional diets don’t work well. They’re too restrictive. Once you get a taste of something that your diet restricts, you continue wanting more and more of it. Your body doesn’t work on a 24-hour clock and neither does your money. Your body is constantly functioning and works on a long-term timeframe as does your personal financial situation. You’re likely going to be alive for a long time, according to statistics, and the one-time binge isn’t going to have a significant impact over that timeframe as continued bingeing will. You can fit those extra calories in or that extra spending into your budget if you change the timeframe in which you’re measuring it as a failure.

Sure, people lose weight from following diets all the time, but the real problem is that they regain that weight the majority of the time. I’ve read someone make a statement before that “America doesn’t have a weight loss problem, it has a weight regain problem.” I don’t think this is too far off. How many times do you see someone do really well and lose weight just to regain it a year or two later?

The same can be said for your financial situation but personal finance isn’t as public as weight loss, so it’s harder to see in people’s lives. People will post on social media all the time and say, “I can’t believe I’ve lost 10 pounds in a week! #FitFam #Fitspiration” (There’s a whole slew of problems with this statement that I’m not even going to get into). No one ever posts and says, “Hey guys, I’ve been really diligent in making personal finance changes and spending wisely and I saved $500 this week compared to what I’d usually spend!”

Binge spending happens to people when they’re making great progress towards their financial goals just like binge eating happens to people when they’re making great progress towards their physique goals.

Don’t be so restrictive in your spending and budgeting that you go off the rails when you finally treat yourself or buy something that you’ve been wanting. Build some treats and things that you enjoy into your budget regularly. You need to allow yourself to spend money on things that you enjoy. Otherwise, what’s the point in earning more money than necessary to cover the basics?

Prolonged bouts of poor financial decisions will have a much greater impact on your financial situation than one bad choice. Don’t let yourself go down a path of “binge spending” because you’re so restrictive on yourself that once you do actually spend on something you get a little taste that you want more and more of. Continuing to spend money on things that you haven’t planned for just takes you that much farther away from reaching your financial goals.

Whenever you make a poor money decision, just accept it and get back on track. Don’t compound the negative effects by continuing to make more negative financial decisions just because the first one gave you momentum to do so.

I also probably wouldn’t recommend a “Treat Yo Self Day”, unless you’ve budgeted for it.