Reactionary Spending: When it Happens and How to Spend Instead
I am currently enjoying a hot chocolate at Eightfold Coffee on Sunset Boulevard in Los Angeles the morning after the Red Sox defeated the Dodgers in a close 3-2 win powered mostly by Ceddanne Rafaela, who also happened to hit the go-ahead home run to secure the win the night before. But the biggest news in Dodgers Nation right now is not losing two consecutive games to the Red Sox (who would go on to sweep the series with a win Sunday after my first draft). As last night’s game ended, the Dodgers traded three top prospects to the Detroit Tigers to add reigning Cy Young winner Tarik Skubal to their pitching rotation.
Dodgers fans are excited. They want to win a third World Series in a row, and Skubal helps. When asked about the trade after the game, Dodgers-tormentor Rafaela said of the Dodgers, “I think they have everybody, probably.”
Rafaela may be right. The Dodgers are a team composed of all-stars, but they just gave up three pieces of future baseball talent to acquire one elite pitcher for three months. Tarik Skubal is a free agent at the end of the year, at which point the Dodgers will have to pay a ton of money to keep him, and their three talented young players are gone either way. The Dodgers reacted to a current problem (they need pitchers who can get out Ceddanne Rafaela in a hypothetical World Series matchup) by solving it immediately (acquire the best pitcher in the game, Tarik Skubal, so maybe someone can get out Ceddanne Rafaela), but the solution creates future issues for the Dodgers (leaving a talent gap for future teams, requiring more spending).
Individual reactionary spending works similarly. An individual has an emotional reaction, solves it by spending, but potentially hurts their future financial position due to that reactionary spend. A long day at work exhausts a young 9-to-5er and leaves them little time to cook, so they opt to save time by ordering delivery. This solves their immediate hunger while exhausted and is quicker than cooking, but the cost of delivery means they either (a) cannot go out to dinner with their friends on Saturday as planned or (b) will exceed their food budget this month if they do.
Using money to address our short-term problems can set us up for financial difficulties in the future. That delivery order versus dinner with friends scenario is minor, but a lifetime of similar decisions can significantly hurt our ability to grow wealth for our future financial goals.
Reactionary Spending versus Intentional Spending
Spending money based solely on wants and needs in the present is reactionary spending. Reactionary spending often offers short-term relief to an immediate problem.
In contrast, intentional spending considers longer-term priorities. The young 9-to-5er still feels just as exhausted but may realize they have some leftovers in the fridge or enough ingredients to pull together their basic go-to meal when they do not feel like cooking something substantial.
On a larger scale, reactionary spending is the one-week July or August vacation someone books in June realizing they are approaching burnout and just need a break. They spend the highest prices on flights and lodging since their trip falls in the high season and they booked so late that budget-friendly options no longer exist. Intentional spending is the two-week vacation in June booked the preceding fall by a person excited to travel to a particular destination. The intentional spender likely spends less than the reactionary spender while getting twice as much time away.
This example clarifies that reactionary spending usually involves spending to run away from a negative emotion while intentional spending runs towards a positive experience. The exhausted delivery order and the burnout-avoiding vacation are expensive solutions to problems unrelated to dinner or travel. Dinner with friends is a fun social event to prioritize, and the two-week travel event prioritized in advance is a highlight to anticipate with joy for months.
While most of us have moments of reactionary spending and intentional spending, the more reactionary spending we do, the less intentional spending we can enjoy. When reactionary spending starts to detract from our intentional spending, we feel unhappy because our spending is no longer focused on our most important spending priorities. When we center our spending priorities, by spending intentionally, we are happier.
How to Spend Intentionally
Intentional spending starts by deciding what you value most so you can align your spending with those values. If you value annual trips to Mexico but are spending all your money on takeout, you are not spending intentionally. Reallocate that money to a travel fund that lets you go to Mexico!
We often assume that intentional spending means incorporating a stringent budget, but it actually just means admitting what spending categories give you the most joy so you can allocate your money towards those spending categories. Once you figure out your spending priorities, stop spending on things you do not value but spend on in a reactionary manner. This reflection will usually show you that you spend on something for a “quick boost” that does not actually add value to your life.
Just going through the exercise of considering how much money any reactionary spending detracts from the areas in which you want to spend intentionally should give you pause before spending. I do this by considering how many hot chocolates something costs since hot chocolate gives me immeasurable joy. Your measurement should be different, but you undoubtedly have something.
If you find reactionary spending impossible to curb with just the mental comparison, put some restrictions in place to make it difficult. Send money directly to a “Dinner with Friends” high-yield savings account (HYSA). If you want to order delivery after an exhausting day of work, you have to go into your HYSA and transfer that money out of your “Dinner with Friends” account to allow you to purchase delivery. The process forces you to see that you are detracting from a future spending priority, and there is simply extra friction in the transaction. Each step gives you another chance to contemplate whether the purchase is worth it. You will likely find that it is not worth it as frequently as it was when reactionary purchases were easy.
Why We Are Not the Dodgers
The Dodgers may win the World Series with their three former MVPs and two former Cy Young winners, but they also may have given the next MVP or Cy Young winner to the Detroit Tigers. They are all in on 2026, but going all in on 2026 makes 2030 look a little more questionable.
Given their willingness to spend hundreds of millions of dollars, the Dodgers will probably recover and buy the talent they need in 2030. You do not have hundreds of millions of dollars, so your reactionary spending comes at a cost. The costs are your long-term financial goals, and sacrificing them for fleeting joy is not worth it.
Today, I will not buy some of the more expensive food options when I go back to watch the final game in the Red Sox versus Dodgers series, even if the Dodgers score first and I feel I need a boost. I will sit in the Reserve level since tickets at lower levels of the stadium are far too expensive, and the view from the Reserve level still shows the beautiful trajectory of a Ceddanne Rafaela homer.
Not spending on the expensive-but-enticing food and seats offered at Dodger Stadium today means I will have the money to sit in a seat at Fenway Park if the Dodgers and Red Sox both make it to the World Series in 2026. Avoiding reactionary spending today means I can go see the best series of the year, if it exists.
Today, I will watch Ceddanne Rafaela attack the Dodgers pitching staff from the Reserve seats for the third day in a row. (Rafaela did, in fact, hit another home run in the final game of the series to bring his total home runs in the three games against the Dodgers to four.) In October, I hope to see whether the Dodgers can win a third World Series in a row or whether Ceddanne Rafaela remains unstoppable with Tarik Skubal pitching. That matchup may not happen, but thanks to intentional spending, I will be in Grandstand 20 at Fenway Park if it does.
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