What kind of problem overspender are you?

We've all dropped money on goods and services that we really didn't need, but seemed like a great buy at the time.

Even Tina Tehranchian, a certified financial planner (CFP) with Assante Capital Management Ltd. in Richmond Hill, Ont., has questioned some of her own purchases.

“Even when one thinks they’re disciplined, you’d be amazed when you do a cash-flow worksheet what you don’t know you’re spending money on,” Tehranchian says in a phone interview from her office.

“The first time I did cash-flow worksheets on myself was when my son [who is now 26] was little, and I learned I was spending three times more on toys for him than saving for his education. I’m saying to myself, ‘This is not right. A two-year-old can’t tell the difference between a cheaper toy and more expensive ones.’”

Tehranchian says whether something is a bad purchase comes down to the individual, but she cites some other common buys that can cause regrets.

"For men, it might be cars - any car can get you from point A to B, but do you really need that fast car with features that you may not use but may make you feel good? For women, it might be clothes and jewellery that they may never use.”

So how does bad spending happen?

There may be some psychology behind it, something called "post-purchase rationalization" (also called Buyer's Stockholm Syndrome) – comforting ourselves after we purchase a product that isn't quite right or needed. In the case of overspending or buying needless things, this self-comforting works to justify our mistakes, prompting us to repeat them.

Tehranchian says controlling overspending also comes down to figuring out what type of problem spender you are, including:

• The impulse spender: “We see this nice, shiny object we fall in love with and want to pull out that wallet and buy it.”

• The clued-out buyer: You have no idea where you stand financially, so you think buying that clothing or jewelry won’t have an impact on how much you can afford.

• The sales jumper: “They see an offer somewhere, it looks attractive and they go for it. But two weeks later, they see they can buy the same item or service at a significant discount.”

• The feel-good buzz shopper: “One of the big problems these days is that many of us shop out of boredom – shopping should be based on need and not boredom.”

• The good-intentioned buyer: “Gym memberships are one of the most wasted items for most people, who think that just belonging to a gym, they will get fit, but that won’t happen unless you do the work.”

• The compulsive spender: “I have some clients with very high income and are very big spenders, and it’s embarrassing the amount of money they spend on unnecessary stuff.”

How to prevent “buyer's remorse,” as Mike Henry, Bank of Nova Scotia’s senior vice-president of retail payments, deposits and lending, calls it?

Henry, Tehranchian and other experts say it usually starts with putting together a budget – either on paper or digitally through one of the many apps and online tools - and being disciplined in sticking with it.

For financial fitness, "make a list of what’s important to you, and what money is coming in and what's going out," Henry says, comparing it to physical fitness where you count calories coming in and calories burned.

“Even mad money can be incorporated in a budget – that way you have a little bit of flexibility to take care of something you really want.”

And well before you pull out that cash or credit or debit card, ask yourself:

Do you really NEED that item or service, or just WANT it, and can you wait on making a decision?

Tehranchian also gives these spend-smart tips:

Say it with cash: If you find you are spending too much on something, such as eating out, try carrying only the amount you’ve budgeted for dining out, and once that runs out, you’re done till the next month.

Make cash back offers and debit-saving programs work for you: They can be great for making money or saving while spending, but “if know you have a weak spot for certain types of spending, you have to try to rein it in,” Tehranchian says.

Ask for a discount: "For certain services [such as renovation contractors], you’d be surprised how many would give you a discount if you ask.”

Be wary of store email and text alerts: Unsubscribe from retailers if you get overly tempted to act on “special deals” or extra reward points for shopping before a small window of opportunity runs out.