Why you should spend money only when you have it

Rose Carmelle Lacuata, ABS-CBN News

Posted at Jun 07 2016 09:59 PM

MANILA - Spending money that you do not have yet is a problem of many people, especially those who expect bonuses in the coming months.

Edelweiza Mabalay-Techo, author of the blog "Life In Manila," enumerated some of the factors that can lead people into spending money prematurely.

One of the factors is peer pressure, when one buys an item to fit in a group.

"The need to be accepted by your friends, the need to belong," Mabalay-Techo said on ANC's "On The Money."

Aside from peer pressure, a person's competitive nature can also be a factor.

"There's a sense of competition, like, if others can have it, I can have it too, or I can have it better," she said.

Temptations like mall sales, easy credit and zero-interest promos from credit card companies, as well as social media envy, can also push a person to spend money on items they don't really need.

"All of these reasons make them forget the state of their finances. So they continue to do this, and sooner or later, it develops into a habit," Mabalay-Techo said.

She also said that some people feel a certain thrill when they buy an item they have been longing for with money they can get.

"The thrill comes from the acquisition itself, how you've been able to buy something that you've been wanting to have by borrowing money to finance the purchase," Mabalay-Techo added.

She, however, warned that the thrill usually does not last long, and looking for another source of this thrill can lead to huge debts.

"They get into debts, and as I've said, it develops into a habit that is hard to break, and also, eventually they get more problems out of it," Mabalay-Techo said.

How to get out of this debt?

Mabalay-Techo said following a strict budget and controlling credit card use can help curb this bad habit.

"The key is setting up the budget and thinking of the consequences of those actions," she said.