3606: 5 Myths That Encourage Excess Spending by Dori Cameron with Becoming Minimalist on Money Mindsets

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[00:01:00] This is Optimal Finance Daily. 5 Myths that Encourage Excess Spending by Dori Cameron with BecomingMinimalist.com. It happens in an Instant. It happens in an Instant. The internal dialogue you have when considering an online or in-store purchase. For some people, it's buying and restoring furniture. For others, it's electronics. Whatever it is that you're considering buying, bicycles, clothing, household items,

[00:01:30] here are five myths that encourage excess spending you want to overcome. Number one. The I-Can-O-Wees-Return-It myth. The opportunity of returning an item is a common justification of excess spending. When you have that George Foreman grill in your hands, it seems like a great idea. Thinking you can return it to the store if you don't like it makes spending that $30 an easy decision.

[00:01:57] But have you considered the amount of time and effort that would go into the return? Surely, you would have to store the packaging it came in, keep the receipt, clean it, repackage it, travel back to the store for the return, wait in line, and hopefully get a refund. Each store has a different return policy and rules that vary. Is the return policy 14 days? 30 days? 60 days? Does the item need to be unopened?

[00:02:26] What happens if you misplace the receipt? There are so many nuances involved with returning items that it can quickly become a hassle. Is there another way you'd like to spend your afternoon than waiting in a target customer service line? If you're thinking, I can always return it, the item may not be something worth purchasing in the first place. Number two, the I can always sell it later myth.

[00:02:51] Selling online has evolved from eBay and Craigslist to smartphone apps that are incredibly easy to use. The LetGo app allows you to take a photo, name your price, and even generates a title for your item based on your photo. The app pulled items for sale in your area, creating a virtual endless yard sale. You would think it's easy to sell online given all these new tools and apps, but the ease of use increases the number of items posted for sale.

[00:03:21] Selling unwanted items also requires time, planning, and thought. How many messages do you check from people interested in your item? How many of those people schedule to come see it but don't show up? How much time have you allotted to meet with potential buyers only to not make as much money as you expected? Of course, there are some people who run very successful resale businesses, but to others it becomes quite the time burner.

[00:03:47] Was selling your old iPod Nano for $25 worth the time and energy spent on the sale? Is there something else you would rather do with your time? A rule of thumb when making a purchase is to assume it has no resale value. Saying to yourself, I can always sell it later, before a purchase, assumes that a buyer will follow through with the sale at the exact time you want to sell it. All variables which are not guaranteed.

[00:04:13] Number three, the I can always give it away if I don't use it myth. If reselling your clothing online via the Poshmark app doesn't work, you can always give it away, right? Surely there's a roommate, neighbor, or thrift store that could benefit from the blazer that's a bit too snug, but you purchased because it was on sale. By placing perceived value on your clothing, you're assuming that a thankful recipient is waiting for and ready to accept your donation.

[00:04:41] In the U.S., fast fashion clothing stores are creating a surplus of clothing in both retail and resale stores, as well as landfills. Is there a better way to give back to others or your community than dropping off used goods at a thrift store? Becoming more mindful about your internal dialogue when shopping online or in person is key and could leave you with extra time and money to use in more fulfilling ways.

[00:05:08] Number four, the I can always repair or restore it myth. I admit, there are times when I purchased a desk or coffee table that needed a little TLC. In my mind, I was seeing the item in its complete restored glory. But how much money in materials, sanding tools, paint stripper, stain, finish, would it really cost to restore? How much time would I need to invest in the restoration?

[00:05:34] There are those who find great joy in restoring furniture, jewelry, or cars, but the average person may not have the motivation, tools, or skill to repair or restore these items. If you're thinking, I can rebuild that engine, or I can restore this mid-century dresser to its full glory, consider the time and materials involved before making the purchase. You may end up realizing there's a different way you would rather spend your time and money.

[00:06:03] And number five, the I can always put it into storage until I need it myth. On-site and off-site storage is extremely common in the U.S. If you go into someone's basement, attic, or garage, you're bound to find seasonal or barely used items. When buying items used so infrequently that they must be stored out of sight, consider your alternatives. Do you need to have your own bike even though you could rent one instead?

[00:06:30] Do you need to hold on to old toys for the third child you may or may not end up having? Have you considered how a wet basement or a hot storage unit will affect your belongings? When deciding to store items or let them go, I like to consider the joy factor. Is there someone else who would get more joy out of the bike you're not using, or the toys you'll likely donate straight from storage? When you're in buying mode, ask yourself where in your house the object will likely be a year from now.

[00:07:00] If you picture your purchase collecting dust in the garage, you may be better off not making the purchase at all. These five myths arise in order to justify purchases we may otherwise not consider. There's joy to be found in the things we purchase. The goal is to practice being more mindful about the things we do buy. You just listened to the post titled, Five Myths That Encourage Excess Spending,

[00:07:30] by Dori Cameron with BecomingMinimalist.com. My philosophy with money? It's a tool for freedom, not a source of anxiety. Wealthfront helps you tune out the noise and earn more on every dollar with a high-yield cash account and sophisticated, easy-to-use investing products. The Wealthfront cash account offers an industry-leading APY, no monthly fees, and easy transfers to Wealthfront's expert-built investing products.

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[00:09:21] I think it's important to remember that we've been culturally conditioned to be consumers. And so the mental justifications described in this article make a lot of sense. I think it takes a huge mindset shift to be more intentional about spending. And I also think it requires slowing down to be more thoughtful. We all move so fast through our days, getting things done, making decisions, etc.

[00:09:48] I think slowing down and taking our time to make a purchase can help thwart a lot of these justifications. It also gives us space to contemplate the trade-offs. Everything we buy comes with an opportunity cost that might not be immediately apparent. The accumulation of stuff gets heavy over time. We need to store it, protect it, maintain it, etc. When we're not careful, the stuff we own starts to own us

[00:10:16] and occupy too much of our headspace. And finally, when we slow down, we open up more opportunity for creativity and resourcefulness in getting our needs met. But that should do it for today. Have a happy rest of your day. And I'll see you on the Thursday show tomorrow, where your optimal life awaits.