Business

Why Am I Spending Money Like I Have It?


When she was on salary, the writer brought lunch to work and drank office coffee to save money. Now that she's freelance, she is buying everything in sight. And there's a good reason for that.



Right after leaving a job, some people drink. Some cry. Some binge-watch Gilmore Girls. I went shopping. Within about a week’s time, I bought four pairs of jeans, two pairs of boots, five kinds of fancy cheese, six dining-room chairs, a bookcase, a chaise longue, a vacation to Florida—wait, it gets weirder—two toilets, and a new kitchen floor.

This is not my m.o. For one thing, I can’t abide malls. As soon as the Sephora looms in sight, I come down with an acute case of Mall Derangement Syndrome (symptoms: forgetfulness; aimless wandering; occasional whimpering; purchasing all the wrong things in all the wrong sizes). I usually have to get to the point where I’m down to one article of clothing without holes before I’ll drag my ass to a store. Plus, I’ve got a history of (relative) frugality: While commuting to my glossy women’s-magazine job, I brown-bagged my lunch, swilled gallons of free office coffee, bought sensibly priced shoes (this devil wore Aerosoles). More crucially, I’d carefully socked away savings for years while paying off my credit card in full every month.

I had always anticipated that transitioning from full-time-with-benefits to freelance would cause me to hack my cash outlay to near-Amish levels. So why did I start spending like the wife of a tinpot dictator?

Obviously, I’d heard of retail therapy (see: worked at a women’s magazine). An Ebates.com survey in 2013 found that about 64 percent of women had shopped and spent money to boost their moods. But I wasn’t feeling particularly grim or anxious. In fact, since my last day in the office, I had felt downright gleeful. On a scale of 1 to 10, if 1 was clinical depression and 10 was Tom-Cruise-on-a-couch, I was a solid 9. So did my massive shopping spree truly qualify as retail therapy?

Well … yes, according to Brad Klontz, Psy.D., a financial psychologist in Hawaii and co-author of Mind Over Money. Even though I hadn’t been feeling consciously anxious, I had been spending emotionally. And he explained why: “On an animal-brain level, you know a famine is coming. Think about dieting: When you know you’re about to restrict your calorie intake, your body conspires against you. Suddenly, you start fantasizing about cheeseburgers.” So it stands to reason that if you know you’re about to make less money, Dr. Klontz said, you might find yourself “spending it while you have it.” And that’s not the only factor leading someone who’s left a corporate job to drop a lot of cash: When you have more free time, he said, you have more time to think about stuff you want to buy.

That’s what happened to Lauren, a media executive who was laid off last year. After leaving her high-pressure position, she found that “everything felt like an opportunity. An opportunity to buy a cupcake, to browse at a store. For two years, I didn’t have time to buy anything in person. Now, I feel such a sense of freedom that I want to have all these normal experiences all at once.” She added, “I have been spending a ton”—like $30 for a pound of scallops for dinner—“mostly just because I’m so thrilled to be out and about after years chained to a desk.”

Lauren admits this “extreme exuberance,” as she calls it, can’t last forever. But for a time, I was concerned that mine just might. So I called Farnoosh Torabi, personal finance expert and host of the podcast So Money, and asked her how to normalize spending after a retail-therapy binge.

First, she said, see where all your money is going on a monthly basis—i.e., regular, essential expenses. If there are any recurring bills you can cut, do it. Case in point: I shopped for new auto insurance, and sliced about 40 percent off my annual bill for the exact same coverage. Turns out, if you don’t use your car to commute and you’ve had a clean driving record, you can usually reduce your premiums. Also, she urged me to schedule some of my free time—to have breakfast with friends, to go to the gym—so that, in one of my giddier moments, I wouldn’t find myself at IKEA carting out a whole new living-room set.

In the case of a job loss or change, she said, use the life event as an excuse to stop spending in areas of your life where you’d long wanted to make cuts but were too wussy to follow through, she adds. “After I lost my job in 2009, I took it as a great excuse to break up with my trainer, which I wanted to do anyway,” she said. If you say you’re cutting back because you were laid off, she points out, “no one’s going to argue with that.”

Ultimately, for me, the best antidote to the crazy spending may have come via email: My monthly credit-card statement. I’ve definitely reverted back to normal. And now, I’m coping with my change-of-lifestyle in the new old-fashioned way: curling up with Lorelai and Rory, and a glass of wine.

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