With many Canadians overwhelmed by debt and financial anxiety, one money expert is warning consumers about “doom spending.”
Robyn Thompson, a financial adviser and founder of Castlemark Wealth Management Inc., says doom spending isn’t actually a shopping problem.
“It’s an emotional kind of buffer,” Thompson said in an interview with CTV Your Morning last week. “When you look at doom spending and you hear that word, it’s easy to think about people clicking ‘(add) to cart’ and buying and buying and shopping. But the problem is actually much deeper than that.”
A top worry for Canadians is their finances, Thompson says, so they may turn to shopping for “comfort” and “certainty.”
How do you prevent or stop doom spending? She said consumers can ask the following questions before making purchases:
- Is this purchase something that will provide long-term value for you?
- Did you think about this purchase beforehand, or is it only right now?
- Are you buying something because you need it, or are you buying something because you want some relief?
She raised the concept of the “return on personal power” as part of the solution.
“The idea here is that everything that you do contributes to either increasing your value or decreasing your value,” Thompson said. “So, when you’re making a purchasing decision, you’re either moving closer towards your longer-term goals or you’re moving away from them.”
Thompson said it’s important to understand the problem, identify the “emotional pull,” talk to a friend and take 24 hours before making a purchasing decision.
“Don’t buy because you’re bored, don’t buy because you’re overwhelmed. Buy because it’s what you really want to do,” she said. “This isn’t about not spending; it is about intentional spending.”
“You’re either funding your future, or you’re financing your fear,” she added.
You can watch the video above for the full interview.
