Yolo or Nolo, Don’t Ruin Your Life by Overspending

Notwithstanding the growing number of people who profess a belief in reincarnation – and more than a quarter of Britons polled in recent years have said they do believe – the adage, “You only live once” (“yolo” for short) seems to be a guiding philosophy in our culture, sort of a contemporary version of carpe diem. Mostly we use it rationalise indulgences of various sorts, whether we’re sneaking an extra piece of cheesecake, taking a possibly foolish risk, or spending impulsively on something we really don’t need. Indeed it is in our spending habits that many of us consistently and clearly demonstrate the yolo mindset.

In a survey taken by the Government-backed body The Money Advice Service (MAS), nearly two-thirds of Britons, 61%, admitted to being yolo spenders who made impulse purchases without really considering the impact upon their finances. Purchases included clothes, unnecessary gadgets, eating out and takeaways. The monthly average spent by these people was £162, which over the course of a year could add up to £1,944. That’s nearly £2,000 that could have been saved, invested or at the very least spent on more thoughtful purchases.

According to the survey almost a quarter of the yolo purchases were made with credit cards, payday loans and other means of debt that can easily make an item far more expensive in the long run than the original purchase price. And perhaps not surprisingly, paydays were the times people were most likely to splurge without thinking. Something about suddenly having money in one’s pocket or bank account often leads to a burst of irrational exuberance (to borrow a term from the stock market gurus), which in turn leads to irrational spending.

The MAS found a gender difference in the spending patterns; men were more likely than women to have made a yolo purchase after drinking alcohol or having a good day at work. They were also more likely than women to feel they were under social pressure to have the latest and most up-to-date item. Women on the other hand tended to make impulse purchases to cheer themselves up, a phenomenon often dubbed “retail therapy”. Women were also slightly more likely to have buyers’ remorse later on – 10 percent of women versus 8 percent of men – realising they could not really afford the purchase after all.

For some people the problem is much more serious than a mere £2,000 a year. True impulse purchasers are like many other types of addicts, and their problem can often be emotionally as well as financially devastating. Some people spend years in debt with the problem getting progressively worse. That’s hardly a recipe for a quality life.

Avoiding the rut

Andy Webb, a money expert at MAS, shared a few thoughts on how people who find themselves regretting impulse buys can curb the problem. He noted that yolo spending thrives on opportunity, so one trick you might try is to leave your credit cards at home when you go shopping, and only take cash that you can afford to spend.

Of course this doesn’t take into account the payment apps available on smartphones (and who wants to leave their phone at home these days?). Nor does it address the problem of the impulsive Internet shopper who can easily rack up hundreds of pounds from the comfort of home. With technology, the opportunity to spend is a nearly constant companion.

Absent the prospect of ridding your life of all technology, Mr. Webb counsels establishing rules that work for you, and sticking to those rules. For instance, make a commitment to comparing prices before taking advantage of a sale, no matter how tempting the bargain may be. You might find that the item you were about to buy isn’t really such a bargain. Or in the time it takes to shop around you might realise you really didn’t need the item after all. Sometimes, just a brief cooling-off period is all you need to keep you from making an unwise purchase.

A couple of years ago the BBC ran some tips on how to avoid or stop impulse shopping. It’s still good advice, and includes tips such as analysing your spending habits; being organised and making essential decisions before you start shopping; researching items before you purchase; and being realistic and knowing yourself. That last bit is pretty important. Being too strict and beating yourself up mentally every time you make an unnecessary purchase can be counterproductive and could actually make you feel worse about yourself, which could lead to buying something else to make yourself feel momentarily better, which could lead to… well, you can see where this is going. The point is, give yourself a break once in a while.

When climbing out of a rut, don’t dig yourself in more deeply

Sometimes even with the most careful planning and exercise of willpower you’ll find yourself in a pickle, needing cash either for an essential purchase or to help pay a bill, but not having many places to turn. While yolo spenders are arguably more likely to find themselves in such a situation, it can happen to anybody. Short-term loans such as payday loans can be a way out of your cash crisis, though the interest rates are higher than with other types of loans. These loans can be a reasonable choice, especially if you have bad credit, but only if you choose wisely and handle the loan responsibly. In order to find the best deal it’s essential that you follow the same rule you should be following when making a product purchase: shop around. Use the loan to help get yourself out of your rut, not to dig yourself in more deeply.

Whether you believe that you only live once or that you cycle through countless lifetimes, the only life you really have a handle on is the present one. There are many ways to sabotage that life by making unwise choices. This doesn’t mean you should never take risks; there’s a lot to be said for seizing the day and making the most of great opportunities when they present themselves, even if there is considerable risk involved. The trick is in learning to distinguish between a good opportunity and a whim. There is a difference, and sometimes just a few moments of careful contemplation can help keep you off the path of self-sabotage.