Bucks Blog: The ‘Just This Once’ Money Trap

Carl Richards is a certified financial planner in Park City, Utah. His sketches are archived here on the Bucks blog. His new book, “The Behavior Gap,” will be out in January.

When we make financial plans or build a family budget, there’s no way to predict one-time financial events, like the car’s breaking down, the furnace’s going on the fritz or a hospital stay.

So we save as much as we can in the hope that it will be enough to cushion ourselves against these financial shocks. But given all of the uncertainty that already exists, why is it that we let ourselves get sucked into other, supposed one-time events that are totally within our control?

Friday was one of the biggest shopping days of the year, and today, Cyber Monday, is another big one. And what is pulling us in? The idea that we’re somehow getting a deal.

Think about how crazy this is. We try to spend 11 months living frugally, focused on our goals. And then we blow the whole thing in four crazy weeks buying tons of stuff we don’t need. Often the discipline that is required to stay on track results in frugality fatigue, and we crack.

The crackup isn’t always at this time of year. But holiday binge-buying has deep roots in American culture. Department stores have been associating turkey gluttony with its spending equivalent since they began sponsoring Thanksgiving Day parades in the early 20th century. And to goose the numbers, they’ve always offered huge promotions too.

Now we may very well have holiday budgets that we’ve planned and saved for, and that’s great. But there’s a trap around these big shopping days that pops up at other times during the year too. It’s the idea that it’s just this one time. Like the excuse we might have heard from a friend in high school as justification to do something stupid, “just this once” is almost always a sign of trouble.

It often starts with a promotion of some sort. Two-for-one. Free prize with purchase. No money down. You’ve seen the ads and heard the pitch. Whatever the angle, the perceived consequence is the same: If we fail to act now, we’ll regret it for the rest of our lives. I’m exaggerating a bit, but there’s no getting away from the fact that marketers know how to get us to act on impulse.

Then there are the days when we tell ourselves we need a special treat, a pick-me-up to make a bad day better. It’s not a big deal; it’s just this once, and we’ve been so good the rest of the time that an extra latte won’t make a big difference to our budgets. But what about the next time, and the time after that one?

We’re tempted all the time to use this “logic” to rationalize bad money behavior. Gifts, vacations, clothes and anything else that’s extra on top of our budgets often gets justified with that notion that we’ll do it one time and then never again, or at least not that often. Yet it keeps happening.

I’m not saying that we should never do something special that requires some financial maneuvering. But we need to be honest about why we’re doing it and the consequences that may follow.

And if the spending happens often enough, we have to stop referring to the these things as one-time events. Instead, account for that extra something in a budget when it starts happening on a regular basis.

By continuing to allow these optional, one-time events to in fact be regular, they can be the very thing that stops us from achieving our dreams and goals. And the last thing we want to do is look back and wonder if that trinket was really such a good deal after all.

This post has been revised to reflect the following correction:

Correction: November 28, 2011

Article source: http://feeds.nytimes.com/click.phdo?i=121f0b092241d9107b6271d62947739e