Am I a shopaholic?
According to some online tests, I may be.
I had an uncomfortable argument with the TubHubs this morning about discretionary spending and how I am prone to impulse buy.
Impulse Buying is a habit I admit to. It was always easy to cop to because I can just say, “at least I’m not in debt”.
Not being in debt is not the same as having substantial savings, though.
When I was still in school, it was easy to blame the lack of savings on tuition and student loans. I was one of the biggest whiners about how expensive tuition was and how my education was the ONLY REASON I didn’t have any money left over.
After student loans were paid off a couple years ago, I told myself that I’ll need to start seriously saving. I was able to keep the ‘rainy-day fund’ going, but beyond that I didn’t make much head way. The excuse I made then was that I couldn’t possibly save large sums of money because of the wage cuts I took. In reality, it was because I was spending frivolously.
While I did realise the problem a while ago, I never really seriously looked at how to curb my impulse buy habit. Now that I have no distractions, I forced myself to spend some time researching theories and ideas behind shopping addiction.
Shopping Addiction Symptoms, Causes, and Effects – Seriously, this article actually exists. There are actually drugs that you can take in order to curb your impulses (it’s the same drug they prescribe for Alzheimers).
Though, based on the list provided there of “Are you a shopaholic?”, I don’t really compare. I don’t have financial hardship, and I don’t feel a ‘euphoric rushes or anxiety’ when I’m shopping.
That article annoyed me more than I thought it would. It felt like another way for drug companies to tell you that you need drugs to curb your behavior. I need behavior tools, not mental state altering chemicals.
After some more research, I found this blog: The Simple Dollar. There is an article there listing 10 tools to help you prevent impulse buying. It seems like something that was more doable.
Tool number 6 really caught my eye.
6. Calculate the value in life energy
If you’ve been a reader of The Simple Dollar for long, you know about how to calculate your true hourly wage. Keep that number handy, and the next time you want to buy something, divide the price of the item by your true hourly wage … this will tell you how many hours of your life you had to give up to buy that item. Sometimes the number of hours can be eye-opening, especially for more expensive items. Consider whether you really want to give up that much of your life for that item.
Then I went on to read about the “true hourly wage” he mentioned. I went through and made a spreadsheet to calculate my actually hourly wage.
To get your actual hourly wage, you take your annual salary, deduct tax, then deduct any expenses related to work such as childcare, lunch, commute, etc. Then you take that annual number and divide it by the actual hours you are working through the year.
Here is the assumption I had (and probably most people had) based on googling annual salary to hourly:
The average, full-time, salaried employee works 40 hours a week. Based on this, the average salaried person works 2,080 (40 x 52) hours a year. To determine your hourly wage, divide your annual salary by 2,080. If you make$75,000 a year, your hourly wage is$75,000/2080, or $36.06.
So making 75 grand is pretty great, right? …. NOT.
When I plug in 75,000 as the annual salary into the spreadsheet I made, here is what I got:
Notice that my Work deductions are LOW. I don’t have childcare, and I have a cheap commute (transit). I included clothing/vanity for office appropriate clothing (that I otherwise would never buy) and make up (that I otherwise would not need to wear). My tax deductions are based on the Australian income tax rate.
Still, my actual hourly income on $75,000/year is really only $22-23/hour.
So I sat here and let that sink in for a bit. When I consider that I’m only making around $20 an hour, that really puts a damper on impulse shopping. Now instead of just thinking about what I can afford, I should be thinking about what I can afford after savings.
There are other great tips in this article, but number 6 caught my eye as it speaks directly to how I think.
Thanks, The Simple Dollar. I’m now a little bit more money-savvy. I hope.