Why we do it: Reader Sally S. tells the story of a deeply broke friend: “One night, he went out and blew $2,000 in a club,” she says. “He figured any more debt was a drop in the bucket, compared to the money he owed.” Though this is an extreme example, splurging in bleak economic times is a common behavior, and thought to briefly boost self-esteem.
How to fix it: Freedman suggests a pair of ways to battle your urge to splurge.
First, understand how much those little expenditures really cost you. “There are various kids of calculators online — debt repayment calculators. Run the numbers. Remind yourself that if you’re paying 17.9 percent interest, it’s a big damn deal to add to that debt.”
Second, don’t deprive yourself. “Treat yourself occasionally, but do it smartly. Get creative,” she says. Go to the movies, for example, but use a discount card.