Financial therapy in action
By Mikelann Valterra, MA, AFC©
“Can I afford to take two weeks in Hawaii?” … “Should I do the facial package?” … “I really want a new couch!”
Spending decisions are all around us. “Should I really buy this”? “Can I afford this?” “Should I do this?”
I often tell my clients,
“You can do anything you want, but you can’t do everything you want”.
So how do you know what you truly want? In the coming weeks, I’ll share a series of questions I pose to clients to help them make better spending decisions. These questions tap into our intuition and other parts of ourselves, so we make a decision we feel great about.
Benefits of good spending decisions:
- Avoid feeling guilty over purchases.
- Discern faster if you should buy something.
- Process a potential big purchase on multiple levels to ensure satisfaction.
Welcome to an important aspect of financial therapy.
Today’s spending decision question is: Will this purchase give me short term or long-term satisfaction? Said another way, will it give me a fleeting feeling of pleasure or long-term happiness? Is this just about feeling good right now?
One way to discern this is to ask yourself: when did this desire arise? If it is very recent, it is likely a short-term satisfaction hit. If it’s been on your mind for a while, it may be about long-term satisfaction. I didn’t want the 18k gold earrings at Macy’s until I saw them. But once I saw them, I wanted them! Short term satisfaction!?
Another way to get at this is to say,
“How will I feel about this purchase a month from now, if I spend the money?”
There is nothing wrong with short-term satisfaction. But naming it puts you in a powerful place. If it is short term satisfaction, you may want to spend less. You don’t need to invest as much if it is clearly short term.
While I decided I’d still like the earrings a month from now, I didn’t need to invest in the expensive 18k gold pair. I bought a gold-plated pair that was on sale.
What also helped me decide was another trick—I walked away for an hour. I went to buy something that was on my list, while I mulled over my desire for the earrings. Whenever caught in the “I gotta have it!” simply walk away for an hour. If you still deeply desire it when you come back, it may be connected to long term satisfaction. Regardless, you will make a more reasonable decision when you come back to whatever caught your eye.
Short term satisfaction is often experienced when you are “in the moment” shopping- whether online or in person. Something catches your eye, like jewelry. If a purchase is pre-planned, it is likely more connected to longer-term satisfaction.
This is one reason why shopping with a list is helpful and satisfying. When we purchase from a list we made, we feel less money guilt and more thoughtful. We’ve also had time to look forward to the purchase, making the pre-planned purchase even more enjoyable.
When you pose the powerful question, “Will this purchase give me short term or long-term satisfaction”? it also immediately calls you to your values.
When spending aligns with one of your core values, it is more likely to give you long-term satisfaction.
If you value the outdoors and hiking, hiking gear will give you greater satisfaction than expensive party clothes you spy while shopping. I value dancing and rarely hike, so for me, good tango shoes will give me greater long term satisfaction than the cute hiking shorts or boots I discover while shopping.
If you value home, a good quality couch purchase can feel great and give you long term satisfaction. If you are rarely home, an expensive couch may simply have caught your eye and be about short-term satisfaction.
It always pays to be aware of what you value, when it comes to spending money. If a purchase is connected to one of your values, it is more likely to give you long-term satisfaction.
Remember, this is not about forgoing or depriving yourself by always saying no. It’s about being truly satisfied over the long haul. It’s about feeling good with how you spend your money and buying things that really do give you long term satisfaction.
