How You Get Tricked You Into Spending

Psych 101: How Id, Ego and Superego Trick You Into Spending — and What to Do About It

Advertisers use a lot of psychological tricks to get you to spend your money. From TV to social media, we’re constantly bombarded with images that are designed to get us to buy.

That’s why it’s important to get a better understanding of your own psyche to combat the desire to open your wallet. Let’s take a look at some fundamentals of psychology to understand common money pitfalls — and how to avoid them.

Sigmund Freud and Personality Theory

Sigmund Freud, the father of modern psychology, developed a theory about human personality. His idea was that, deep down in your subconscious, there are three main parts of your personality: the ego, the id and the superego. Let’s look at them order from most primitive to most developed.

The Id: Cash for Pleasure

Think of your id as the devil on your shoulder. This part of your personality represents all of your most basic instincts, including your sex drive and your desire for food and other survival needs. This part of your personality is driven by the pleasure principle, so it encourages you to seek out rewards with no thought about consequences.

Your id is what drives you to spend money on restaurants, spa treatments, luxury vacations and anything else that makes you feel good. Whether you splurge on something big or make lots of little “treat yo’ self” purchases, spending on pleasure adds up. Although we are supporters of “treat yo’ self” but only when you hit milestones so it can be an incentive to save more. Learn more about it in our Core Four of Personal Finance class.

The Solution: The id is impulsive, so develop some roadblocks to keep from spending. Try holding items in your online shopping cart for at least 48 hours before you buy. Use the down time to research your purchase and make sure it’s something you really need before you go back and finish the transaction. Odds are good the initial impulse will have faded in a day or two.

The Ego: Cash for Approval

In Freud’s theory, the ego is the rational part of your personality that helps your id get what it wants. While the id is all feeling and no logic, the ego has learned all about society’s rules and how to work within them to feel pleasure and reduce pain. The ego is all about reality.

Because the ego is focused on negotiating social structures and rules, it’s susceptible to keeping up appearances. Ego-based purchases could lead you to spend too much on designer clothes, fancy cars, and anything else that you do to keep up with the Joneses. In addition to its role in lifestyle inflation, the ego can also keep you from getting financial help out of a misguided sense of pride.

The Solution: Pay yourself first by setting up automatic deposits into a nest egg account — your ego will also feel gratified by this rational planning. To avoid competitive spending, ask yourself this question before you buy something: Do I want this because it’s necessary or because someone else has it?

The Superego: Cash for a Higher Purpose

The superego is like your higher self. It too has learned from society by taking in lessons about morality and justice. Your superego acts as your conscience and leads you to rein in your id — especially if your pleasure-seeking could cause harm to others.

In general, the superego is a good thing that can help you keep your id and ego spending in check. However, the superego can occasionally lead to poor financial decisions. For example, you may feel compelled to give more money to charity than you can afford, or you may feel guilt about amassing wealth and therefore fail to save for your retirement.

The Solution: If generosity is your weak spot, be sure to set limits on donations in your monthly budget. You should also remind yourself that funding your retirement isn’t selfish, but rather an important way to make sure you can continue to help others throughout your life. Think of it as securing your own oxygen mask before helping your neighbor with theirs.

Recognize any of these psychological pitfalls in yourself? Start with these tips, then sign up for Brainy Money’s personal finance courses to take control of your money for good.

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