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Reaction Spending vs. Preparation Spending

Posted by August on Aug 25, 2021 12:38:38 PM

So, you've worked hard to get to a good place financially; you're paying your bills on time, you're able to buy a few extra things that you want, and if an emergency happens, you always find a way to cover the expense.

Financial security is a major accomplishment, especially after the financial toll that the last year has taken on all of us. However, once you've gotten to a secure place, evaluate your spending habits and make sure you're exercising preparation spending instead of reaction spending.

Reaction Spending

When you're in a good financial place, it's easy to get into a habit of reacting with your money. You know there's enough money in your account, so you're not as worried or aware of your spending.


The quote above is a perfect example of reaction spending. You go into a store with no plan and buy anything that strikes your eye under $10. Then, you get up to the register and all of those cheap things you wanted start to add up. You're reacting with your money in the heat of the moment and letting it tell you what you need. Or if you're like me, you're letting influencers and TikTok tell you what $10 thing you just have to have.

The major difference in reaction spending vs. preparation spending is planning and awareness of where your money is going.

Preparation Spending

If you're in a good financial place, you can probably afford the $10 must-have thing you saw on TikTok; you just have to prepare for it. Go into the store with a plan. Know exactly what you plan to buy and how much it's going to cost. If you can't avoid the browsing temptation, try curbside pick-up or buy it online.

By exercising preparation spending, you're able to take charge of your money and tell it where to go instead of the other way around. A great way to prepare your money is with a budget. Not sure how to budget? Don't worry; Carolina Trust has a Budgeting eBook to help you get started. You work hard for your money, so don't let it magically disappear.

Topics: Personal Finance