Monday, May 12, 2008

Money Worries

Worry 1: I Spend Too Much
Why is this such a pervasive problem? Credit cards are partly to blame (have plastic, will spend), but it turns out you really were born to shop. Scientists have learned that when you anticipate buying something tantalizing, like a chic cashmere cardigan, your brain releases dopamine, a chemical that helps produce feelings of well-being. “It’s the same stuff that floods your brain when you have sex or eat a big, gooey slice of chocolate cake,” says Jason Zweig, author of Your Money and Your Brain (Simon & Schuster, $26, Saving money doesn’t trigger the same rush, at least not for most of us. Overspending can also result from poor planning or sheer lack of time — which may be why the average American family spends almost as much eating out ($225 a month) as eating at home ($285). Whether you overspend for fun or convenience, you can break the habit.

Do Right Now:Make shopping harder. First, delete bookmarked shopping sites from your computer. Next, gather the pile of catalogs by your bed, call the toll-free number for each, and ask to be removed from the firm’s mailing list. Or go to, a free service that helps you unsubscribe from hundreds of catalogs.Open your wallet and remove all but one credit card. Put the rest away in a drawer — or cancel them. When you don’t see those department-store cards looking back at you in your wallet, there’s less temptation to spend.Change some of your everyday habits. Plot out the most risk-free routes to and from work and on your daily errands. If lattes are your weakness, that means giving a wide berth to expensive coffee shops. If clothes are your passion, steer clear of trendy boutiques.Cut out convenience foods. Walk to your refrigerator, open it, and take out some baby carrots. Put a handful into five small plastic bags. Toss some almonds or other nuts in five more plastic bags. Presto — your snacks for the workweek, none of which involve expensive (not to mention often unhealthy) packaged foods. Want to save even more? Start bringing your lunch to work and planning (and shopping) for the entire week on Sunday.

Next Steps:Try cash. You’ve heard this before, but it bears repeating: If you don’t put purchases on a credit card, it’s impossible to spend more than you earn. Next Monday embark upon a week in which you use only cash or a debit card. Then try another week and another, until this behavior becomes second nature.Make sure everything you buy is returnable — from bags to boots to bookcases — and always keep the tags for at least two weeks. That’s plenty of time for the thrill of the purchase to wear off. You can then assess with a clear eye whether you truly need that snakeskin clutch.Find new ways to get a dopamine rush. Sign up for a class you’ve always wanted to take, like salsa dancing or Pilates. And the next time you get the urge to shop, log on to YouTube and watch some silly videos: more entertaining and much cheaper.Read This blog has an active group of readers who post their own suggestions on everything from overlooked tax deductions to saving money on hotel rooms. Another great source on saving: the book Your Money or Your Life, by Joe Dominguez and Vicki Robin (Penguin, $15,, which shows how living simply can be the path to financial independence.

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