Updated: Oct 6, 2020
Technology is changing the game. Here's how to adapt.
People are spending more than 2 hours a day on their phones!
Spending 2 hours a day on your phone is like spending 2 hours a day at the shopping mall.
You may not be buying anything, but you are certainly being advertised to, which adds up to influence spending decisions.
Technology is drastically changing the way we interact with the world, with our money, and with each other.
Whether it's Venmo, social media influencers, credit cards, next-day shipping, or targeted advertising, the presence of rapidly changing technology presents serious challenges for us to be able to adapt.
Spending is so emotional, and when there is so much information bombarding us at all times, it is very easy to lose control of good spending habits.
What causes overspending?
With all of these challenges, can we learn how to stop online shopping addiction?
It helps to know what you're up against.
There are 6 primary factors that lead to overspending in 2020.
If controlling your spending weren’t already hard enough 20 years ago, here is how technology makes each one of them even harder!
1. Quick and Easy Purchasing
It's much easier and faster to spend online than it is to drive to a store. With auto-saved credit cards, one-click purchasing, and next day delivery, the system is designed so you don't have to leave your couch!
2. Targeted Advertising
Not only do we see more ads online, they are specifically targeted to us based on our internet activity! Companies create buyer personas based on each person's activity, and then specifically tailor ads for what we most want.
3. Social Influence
We know social influence has an enormous effect on our wellbeing. But in the influencer age, it's becoming increasingly harder to tell when something is just a friend posting and when it is an advertisement, or both.
4. Not Tracking Your Money
Is digital money the same as physical cash? It certainly doesn't feel as real. Especially not when it's quickly bouncing around from credit cards to Venmo to stocks to bank accounts and back.
5. Credit Cards
Online, it's even easier to spend someone else's money. In fact, many online retailers accept only credit cards. It's almost like companies are trying to make it as easy as humanly possible to spend money (ahem... they are!!)
6. Mental Health
We spend more when we feel that what we already have, or who we already are, is not enough. Online advertising and social media are constantly reminding us, or trying to convince us, that we feel this way.
Hacking Your Emotional Levers
Ever seen the movie Inside Out? If you haven’t you should!
It shows how our emotions are like little levers and pulleys inside our body that control our decisions.
The entire advertising industry is built around hacking these levers so that we buy more. Mad Men will teach you that.
If we want to gain control of our spending, we have to become more self aware about our habits and behaviors.
What is causing them? What conditions trigger your spending urges?
When we learn patterns of the good behaviors, we can amplify and improve them. When we learn our patterns of our bad behavior, we can work to reduce them.
HOW TO STOP ONLINE SHOPPING ADDICTION: WHAT YOU NEED TO KNOW
In Money Club, an online course that teaches teens financial independence, we often talk about money like a sport. Earning is Offense (putting points on the board) and Spending is Defense (protecting your money from all the temptations).
And also like a sport, having a good coach helps you learn much faster.
Spending is a complex beast, because there are many sides to it.
There are the external influences such as Quick & Easy Purchasing, Credit Card Lending, Advertising & Social Media.
And there are the internal influences such as your Budgeting, Mental Health, and Spending Values.
educate your FAMILY, students, AND STAFF ON HOW TO STOP ONLINE SHOPPING ADDICTION AND TO SAVE MORE.
Here’s a list of resources to help you get started:
Online Spending - Free online mini-course on credit cards & online spending!
12 strategies to spend less and save more
5 short Videos with Coach Aaron, Coach Gabe & Guests
Debt Time Travel game
Online Shopping Stacking game
A downloadable tool to remind you when the urges hit
Money Attitudes Personality Quiz - Learn your money personality, how it shows up in your life, and what you can do about it.
Money Club - Our premier financial intelligence platform. Related to spending, we cover Advertising & Social influence, Budgeting, and Saving.
To learn more about building healthy money habits and designing your financial and professional life, check out Money Club -- an online game, course, and community of people learning how to be financially independent!