Yahoo Finance 'Hate spending' is the new way Americans are dealing with inflation — how to turn that spending into saving
If you’ve been feeling angry every time you go to the store, you’re not alone.
Consumer sentiment toward the economy saw a decline in April, according to preliminary results from the University of Michigan’s monthly Surveys of Consumers. The consumer sentiment index score fell to 77.9 from 79.4 the previous month.
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But even with their sourness toward the economy and factors such as inflation, Americans have increased their spending in early 2024, according to the U.S. Census Bureau.
Everyone feels the pinch of higher prices, yet we seem to be spending our way through the pain. Business Insider senior correspondent Emily Stewart has labeled this phenomenon as “hate spending.”
“We've all been there: staring down the price of a plane ticket, a new shirt, or a bag of chips and thinking angrily to ourselves … ‘this did not use[d] to cost this much,’” Stewart wrote on April 21. “And then … we buy it anyway.”
What's fueling hate spending?
Stewart spoke with Jordan Hart, an Illinois-based writer who described themselves as thrifty. But despite being “outraged” by high prices, the 26-year-old Hart says she buys $100 leggings at Lululemon and drops $50 for a Stanley cup water bottle.
“With inflation, everything is just getting obnoxiously more expensive,” Hart said. “But at the heart of it, our desire as a consumer and as people to have nice things has not gone away.”
It’s not just consumerist desire that’s fueling hate spending. Stewart also attributes it to Americans’ good financial positions, even if they don't feel it. The country currently has a strong labor market and wage growth has outpaced inflation early in the year, according to an Axios analysis of Bureau of Labor Statistics data. Household wealth increased around 41% from Q1 of 2020 to Q4 of 2023, according to the Federal Reserve.
There also may be a general acceptance that price increases witnessed during the pandemic simply aren’t going anywhere.
“We've acclimated to these inflated prices,” Claire Tassin, a retail and e-commerce analyst at Morning Consult, told Stewart. “I don't know what would force us to hit the breaking point for this degree of consumer spending.”
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What to do if you're hate spending
If you find yourself in a cycle of buying things you hate the price of, you can change this behavior.
The first thing you need to do is shift your mindset. Stewart says that hate spending may stem from people’s general aversion to loss, which is why it’s a hard habit to kick.
“Having to change their lifestyle to fit newfound financial constraints feels like losing,” she wrote.
Stewart gives the example of buying a new dress for a party, even though you have a perfectly good one in your closet.
“Getting the new one is more fun and exciting, even if the accompanying price tag is annoying,” she wrote. “It'll be something interesting to complain about at said party later.”
Shopping can release dopamine in your brain, which makes you feel good, according to the Cleveland Clinic. It can also help us feel more in control of our environment.
“You don't have a choice in the economy and inflation and how that's affecting you, but you kind of have a choice in how much you let it alter your lifestyle,” Hart told Stewart. “It feels like you're admitting defeat if you're just like, 'Well, now it's just expensive, so I won't do it.'"
Another woman Stewart interviewed told her that she keeps buying a new iPhone at least every two years for $1,000, even though she hates spending that money.
“To the outside, that might look like a luxury but to them it says, ‘Hey, this, I need all this for my sanity,’” Ravi Dhar, a professor of management and marketing and the director of the Center for Customer Insights at Yale School of Management, told Stewart.
The good news is that you can get those dopamine hits and feelings of control elsewhere, such as when saving for a big purchase, according to the Cleveland Clinic. You get just as much dopamine anticipating a purchase as actually doing it.
You can focus your hate-spending energy into a long-term plan to save for a bigger or more expensive purchase that you really want — and won’t hate.
It’s also a good idea to create a budget to figure out how much you’re able to hate spend every month. Once you know the number, you can turn that monthly spend into a monthly save and use it for your big purchase.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
