Are You a Victim of “Spaving”?

“Spaving” is the combination of saving and spending and refers to leveraging popular short-term deals that encourage spending more now to save money over time. This trend has become extremely popular on TikTok.

What are the psychological aspects of spaving?

• Spaving is an example of the present bias of money; a behavioral bias in finance that leads people to make irrational decisions that favor perceived short-term gains (“I’m saving money now by making this larger purchase today.”)
• It is alluring because costly purchases are justified by how much is saved. It can make people feel good in the moment (a dopamine release) while ignoring the greater long-term consequences of the choices.
• The behavior has become popular due to the increase in online shopping and targeted marketing that exploits consumer spending habits​.
• Spaving is often fueled by FOMO—fear of missing out on deals. Marketing and social media campaigns very aggressively promote the deals, applying psychological pressure and a sense of urgency to get the deal before it is gone and it’s too late to benefit.
• Consumers are especially vulnerable now, a time of great economic uncertainty. Money and the economy are top stressors for Americans1, especially for those ages 34 to 45. As a way to reduce financial anxiety, people may resort to spaving to give them a sense of power and control over their money.

 

Just as people need to beware of the Buy Now, Pay Later psychological pitfall, they need to be wary of spaving.

Spaving can be very problematic when people end up paying more on credit card interest and fees than the benefit of the savings, or when money is spent on products or services that are not needed or end up being unused. Spaving can reduce access to cash or credit, which can cause financial hardship in the near future.

Spaving examples.

Even as a behavioral economics expert, I noticed recently that I’ve often fallen victim to spaving both personally and professionally. Personally, a couple years ago I purchased a very large quantity of pricey skin products to save significant money per item. The problem is I didn’t end up liking some of the products or using them at the rate I anticipated. Now the products are expiring and I’m throwing money in the garbage can.

Professionally, I purchased a phone system for one year for $1,000 for my new assistant in the Philippines, to save money on the monthly payments. However, several months later we realized we didn’t need the service and haven’t used it once. I’m very motivated to exercise more caution, be mindful of the lure of spaving, and resist making purchases when I am not even sure I will like or need the product or service over time.

Spaving is an effective financial strategy only when you stick to buying what you need and you use all that you buy, saving on the price per unit—for example, buying paper goods and cleaning supplies in bulk at stores like Costco or Sam’s Club.

How to avoid the shopping trap of spaving.

As a financial therapist with over 25 years of experience, I recommend the strategies below.

1. Become a minimalist. If your home is filled with stuff you don’t use or need, do a purge and sell or donate items. Keep your life simple, and create space and time with less stuff to manage. Recognize that spaving can lead to hoarder-like behaviors and that mental well-being can be cultivated by resisting the urge to spave.
2. Make sure you like and need the product or service and that you are not purchasing more than you will use. Buy smaller, less expensive samples and leverage free trials to make sure your investment is a wise choice. For example, if you know you love a certain laundry detergent and know you will use it all before it expires, purchasing a large quantity at a discount is a good use of spaving.
3. Apply mindfulness to money. When excited about a deal, stop and connect with your breath. Pause and take several grounding deep breaths. Get out of your head and check in with your heart and your gut and ask yourself, is this a good choice for me?
4. Find an accountability partner. Protect yourself from yourself by having a financial accountability partner. This can be your partner, best friend, a family member, or another person who is working on their financial health. Agree to check in with each other on a weekly or monthly basis and discuss your spending choices and behaviors, providing honest feedback and accountability. Check in with this person before making impulsive purchases.
5. Use apps like Rocket Money to do a digital cleanse and become more financially aware. Perhaps when spaving, you purchased year-long subscriptions or software that you are no longer using but which automatically renew. Look at your subscriptions in your apps and unsubscribe from what you don’t use. Look at your financial statements to make sure you aren’t still spending money on deals you signed up for when spaving. Apps like Rocket Money, Quickbooks, and Mint.com can help you reduce your spending and become more fiscally conscious and responsible.
6. Delete retail apps, unsubscribe from texts and email marketing campaigns, and HALT: Don’t go on social media or shopping when you are hungry, angry, lonely or tired.

If spaving has negatively impacted your financial situation or mental well being or caused relationship conflict, get the help and support you need and deserve. No shame, no stigma. You are not alone.