5 Ways You Get Tricked Into Toxic Spending (2024)

The latest gadgets, designer clothes, sales, and freebies; we assume our spending decisions are ours to make, but are they?

The way we spend our money can be influenced by external factors without us realizing it. Things like advertising, social media, and big-spending friends may play a role, and usually not a good one.

The good news is these influences are easy to recognize once you start noticing them. Here are five to watch for and avoid.

1. Discounts and sales

Buy one, get one free. Half-off. Limited time. Discount code.

These buzzwords are meant to tempt you to spend money. Flashy discounts rely on your lack of impulse control to make a sale. When you score an item at a reduced price, you feel like a winner. However, the reality is, you’re still spending money. Think of it this way: A sale item you don’t need is a waste of money — no matter the bargain price.

Remember, stores employ dedicated sales teams that know how to convince you to spend your hard-earned money. They do so by advertising discounts, sales, and the best price guaranteed. That’s why it’s best to have a shopping plan before you peruse the latest sale or discount rack.

How to avoid it:

Before heading to the store, write down a shopping list on paper or on your phone. Create one column of needs, which are the essentials and the other column for wants, that you desire but aren’t necessary. Stick to your list by only making a purchase of the items on your list.

Be sure to analyze the price and quality of sale items. If it’s a low-quality item, is it really worth the discount? Sticking to a list will guide your purchasing decisions and foster better spending habits. Pass on everything else, no matter how tempting the sale might be.

2. Advertising and marketing

Businesses want to turn you into a customer and that’s why they have teams dedicated to advertising, sales, and marketing. These professionals bombard us with calls-to-action to spend, buy, or sign up. And it’s hard to avoid it.

Billboards along the highways, visuals are posted to public transit, ads on TV, podcasts, social media, and radio. These sly tactics target your demographic and subtly influence your purchasing decisions. In fact, you might not even realize the influence until it’s too late.

How to avoid it:

Reduce the influence of marketing tactics — i.e. screen time. The less time you spend on a screen, the less likely you are to see or hear an ad encouraging you to spend money. Sign up for ad-free subscription services and unsubscribe from marketing emails. Unfollow businesses or brands pushing you to make purchases. Engage in activities without ads, like playing a sport or reading.

3. Social media

Did you know that social media is pushing you to spend money? It’s true. Social platforms are capitalizing on marketing budgets by showing targeted ads to users. This allows companies to deliver carefully crafted messages directly to your screen. Experts analyze demographics and know exactly where and how to reach you.

As you scroll through social media, notice the targeted and sponsored ad content. Now look closely; you will see a link or call-to-action encouraging you to spend money. These posts blend into the platform and may even look like content posted by a friend, and that’s only one way social media is urging you to spend. In fact, your favorite businesses, brands, and influencers are spamming you with marketing materials on a daily basis. Note that these accounts are incentivized to sway you into buying. So beware.

How to avoid it:

Purge your social media. Unfollow or delete accounts that negatively impact your spending habits. A curated feed full of positive influences, like financial advice, will keep you on track while minimizing the temptation to spend. If you still need help then delete all of your social media for a specific length of time, a few weeks or a few months, before restoring only the apps you miss.

4. Peer pressure

Managing your finances is hard enough, add in peer pressure and overspending becomes a difficult habit to break. Look at your family, friends, and coworkers - are they big spenders? If so, you’ve likely felt financial pressure to keep up.

The good news is that your loved ones probably aren’t influencing your behavior with bad intentions. Typically, financial peer pressure is a form of inclusion; they want you to grab lunch together or take a group vacation. While you would gladly do it, but your financial situation says otherwise.

It’s important to remember that everyone has a different ability to spend. Having more or less money to spend isn’t bad, however, you do need to be honest with yourself about your financial situation before you dig yourself into a financial hole.

How to avoid it:

Have an open and honest conversation with your social circle about your spending goals. Suggest cost-effective alternatives instead of costly events, such as a potluck or game night. Hopefully, they will respect your financial decisions.

5. Societal pressure

Consumerism is a staple of American life. It may seem like everyone wants a bigger, better, more expensive lifestyle. However, spending isn’t a guaranteed path to happiness and fulfillment.

Luxury cars, flashy jewelry, and McMansions are fantasies created to convince everyday consumers to keep spending money. The lifestyles we see online, in music videos, or flaunted by celebrities are meant to convince us that we want that, too. Images of extreme wealth are praised, but the hard work needed to achieve financial stability is often ignored.

The reality is you can’t match the spending power of the extremely wealthy. So ignore societal pressures telling you otherwise.

How to avoid it:

Challenge the ways consumerism affects your life. Reflect on your spending habits. Are your finances and material possessions a source of stress? If so, take stock of your needs versus wants. This will involve creating a budget and adjusting your finances to live within your means. Find a middle ground that honors your personal financial situation.

Bottom line

Consider your financial future. Spot the toxic money influences urging you to spend excessively, and cut out temptation(s) where possible.