Do you know what #GuiltyPleasures spending really is? At first, I thought it was about those naughty purchases we all commit once in a while (say, that expensive bag here, that fancy trip there), but, what struck me like a slap in the face is that Guilty Pleasures spending is actually those habit-inducing spending crimes that many of us commit on a daily basis, if not multiple times daily (at least in my case).
In the lead up to Credit Education Week (happening across Canada from November 6 to 10, 2017), my friends at Capital One Canada made a great point that it is easier than ever to spend money without opening your wallet (hello every app I use to pay for coffee, food and transport) and it’s a serious culprit when it comes to over-spending without even realizing it.
I was lucky enough to join my friends Colin and Justin at a panel event they hosted where they dished on some of their biggest #GuiltyPleasures spending. Check it out in the video recording below!
Capital One® and Credit Canada Debt Solutions recently conducted a study on ‘Guilty Pleasures’ spending and I was rather surprised to discover that I could include myself in every single aspect of guilty spending that fellow Canadians fess up to. To give you an idea of what topped the list, here are the most popular indulgences:
Socializing and going out for drinks is a regular part of my lifestyle and work.
- Dining Out, 72%
- Ordering takeout more than a few times a month and spending over $199, 71%
- Daily coffee purchases, 50%
- Online shopping, 44%
- Clothing purchases, 33%
- Beauty services, 23%
Another interesting finding from this study is that I’m actually not alone when it comes to coupon-ing and trying to save money (or make extra money) where I can. Up until reading the stats I’m about to share, I was certain that I was alone in my love for coupons and finding a deal, especially with my circle of millennial friends and colleagues. Why did I feel that way? Because most of them would make fun of me for doing so. But look who’s laughing now! Clearly I’m not the only one who does this because according to Capital One’s Guilty Pleasures study, when it comes to trade-offs, millennials appear more willing than those aged 55+ to ease the financial strain of their indulgences by:
- Hunting for coupons, 38% vs. 20%
- Selling possessions, 23% vs. 5%
- Cancelling subscriptions, 20% vs 7%
- Getting a second job, 19% vs 4%
Like many other Canadians, dining out is one of my top guilty pleasures
Being able to relate to every part of this study was a serious eye opener and if you’re feeling the same way, it might be time to consider taking a step back in order to be mindful of the financial impact #GuiltyPleasures spending can have over time. You might make up part of the 65% of Canadians who believe they are in good financial standing, or you could be part of the 35% that rates themselves as being in fair or poor standing. Not sure where you fit in? Here’s a breakdown of some of the reasons those in the 35% feel they’re not doing so well financially.
- 36% admit to not putting anything towards savings each month
- 25% of Canadians admit their guilty pleasures spending has kept them from achieving their financial goals
- 39% of millennials experience contention with spouses (29%) and hiding spending (27%)
Shopping in person and online is a regular habit I’m definitely guilty of
Thankfully, there are tips and tools to help those of us who need a bit of guidance when it comes to how we can reel in our somewhat ‘innocent’ and accidentally frivolous spending. See below for 3 key tips from the Capital One and Credit Canada teams to help you keep indulgent spending in check:
- Budget building: Create a realistic budget based on your income. Include necessary expenses like transportation and rent, saving for the future and any discretionary spending. Place spending limits by categories in your budget, and then take your budget for a test drive. Remember that tools like a budget calculator can help identify areas in your budget where expenses can be cut to achieve a specific financial goal, such as a winter getaway.
- Track and evaluate: Track your spending regularly against these set categories to see where your money is actually going. A budget tracker can help track this against your budget, as well as looking at your credit or debit account statements. If guilty pleasure spending is getting out of hand, re-evaluate how often you indulge or consider a cheaper alternative.
- Mindful monitoring: A credit card offers many perks, but it’s important to use it responsibly to reap all the benefits. If you’re consistently holding a balance on your card at the end of each month, take a step back, review your budget and see where you can find efficiencies. Tools like Credit Keeper™ can help you better understand credit and the importance of a healthy credit score to your overall financial health. Credit building programs designed to teach Canadians how to build or rebuild their credit and improve their credit score are also a good resource.
Relying on convenient transportation is my daily vice
There are also tools to help. Credit Keeper by Capital One makes it possible for you to view your credit score and get a good indication of your overall credit health. Credit Education Week is also a great opportunity to take advantage of the events that will be hosted across Canada between November 6th to 10th. Some of the events include credit building programs designed to teach Canadians how to build or rebuild their credit and improve their credit score — not a bad free event to attend if you’re feeling iffy about your own credit situation. More info on Credit Education Week in Canada and the events you can attend in your city can be found at Cewc.ca
So what exactly is my advice from one spendaholic to another? Honestly, it’s to pay attention to the tips for keeping your spending in check and take part in Credit Education Week during November (aka Financial Literacy Month) because clearly, I need just as much help in this department as you do.
Cheers to responsible adulting!
*Please note that this post has been brought to you in partnership with Capital One Canada*