Toronto Star

Cooling-off period can help you avoid financial FOMO

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Often, advice online from people who seem financiall­y successful makes it sound like budgeting or a side hustle or working really hard will achieve you the life you’re trying to build. But that advice often doesn’t mention things like generation­al wealth or luck, said Moorhouse.

For younger generation­s, financial FOMO can be tied to not only smaller items, but also large purchases like a car or even a house.

It may seem like people your age are buying houses while you struggle to make rent, or they’re buying cars while you bike around the city.

But often those people have a financial head start, said Fisch, such as help from their parents or a cushy job.

It’s getting harder and harder for the younger generation to afford things that were once considered necessary, said Fisch, and this creates a lot of pressure on those who can’t meet those milestones.

“That math doesn’t work,” he said, adding that you shouldn’t feel guilty for not being able to afford something that’s out of your control.

And no, buying fewer lattes won’t fix your financial woes (well, that depends on how often you buy a latte).

If you find yourself drawn to something — a shirt, a vase or something bigger — that you didn’t previously want in your life, Knox said you should try planning for the purchase before buying. Where will you wear it? Where will you put it? Is it filling a need in your life?

If you can’t find a place in your life for this item, it’s probably not something you should buy, she said.

You can also implement a 24hour “cooling-off period,” advised Knox, before deciding to purchase something. That gives you time to think about it, check your bank account, and make a more informed decision.

Knox said it’s important not to punish yourself for spending a little bit of money on things that make you happy, and she avoids words like “frivolous” that give measured discretion­ary spending a negative connotatio­n.

Everyone has different longterm goals, and it’s important to know what yours are, said Moorhouse, but also to think about what your short-term joys are. You need to have a section in your budget, or a special savings account, for fun purchases, so that you don’t starve yourself of day-to-day pleasures.

Otherwise, “it’s like a crash diet,” she said. It won’t be sustainabl­e, and you’ll wind up feeling guilty when you can’t follow your own rules.

Akinboyo recommends sitting down with your finances and being honest with yourself about what you can and can’t afford, even if it’s something you would rather avoid.

“It takes a lot of intentiona­lity and discipline,” she said.

Fisch said financial decisions compound for better and worse.

If you make one purchase you regret, remember it’s just one decision among many, and you have a chance to make up for it in the near future.

If you can’t stick to your own budget, that may be a sign you’ve set unrealisti­c goals for yourself, said Moorhouse. Track your spending for a few months, then use what you’ve learned to make a reasonable budget, and maybe to cut down on a few things, too.

Just like a sustainabl­e diet or a fitness plan, there’s no fasttracki­ng financial health, said Moorhouse.

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