How are you doing on the top ten list? If you're not doing at least six of the ten, resolve to make improvements. Choose one area at a time and set a goal for incorporating all ten into your lifestyle.


The Psychology of Spending Money
From Deborah Fowles

In a perfect world, we would all avoid too much credit card debt and would never have to deal with the desperation of being unable to meet our credit card payment obligations. We'd never have creditors hounding us for payment.

We'd never know the frustration of not being able to afford what we really want because every extra cent has to go towards keeping up with the minimum payments on our credit cards. But this isn't a perfect world, and unfortunately these distressing situations are the norm for many people.

If you find yourself in this position, or headed there, take control of your spending now. Don't wait until your situation is so dire that you have few options available to you. An important aspect of debt that is not always addressed is why you got too deeply into debt in the first place.

Why did you keep charging items you couldn't afford? Why did you feel the urge to use those little plastic cards for things that weren't necessary, even when you began to struggle to make the payments? What causes your compulsive shopping? Facing the factors that give you the urge to splurge can be uncomfortable, but if you don't face them, you may never get control of your spending and your debt. If you're always trying to pay off yesterday's purchases, many of which have long since worn out or been forgotten, how will you acquire the things you truly want for tomorrow?

One negative aspect of using credit cards instead of cash is that you don't feel like you're spending real money. The pleasant feelings you experience when you purchase the item are disconnected from the unpleasant or painful feelings of making the payment when you get the credit card statement.

Studies show that most people are much less likely to buy, or less willing to spend as much, when paying with cash as opposed to credit cards. Try leaving your credit cards at home. Pay with cash, check, or a debit card. To really get control of your spending and your credit card debt, you need to examine what money means to you. Make an effort to notice how you interact with money and what beliefs and attitudes you have about money. Studies also show that people with low self-esteem engage in more impulse spending and buying things they don't need.

Remind yourself daily that money or a lack of it doesn't determine who you are. Your worth as a person has nothing to do with how much money you have. Once you truly believe this, and money is no longer connected to your sense of self-worth, you open up the psychological barriers that were keeping you from wisely handling the money you do have and limiting your ability to make more.

Right now, your unconscious limiting beliefs may be keeping you from being financially successful, but as you begin to build up your feelings of self-worth and develop a positive attitude about yourself and about money, you'll attract positive things into your life. As you do so, you'll feel less of a need to generate positive feelings by purchasing things, and you'll find it easier to stop buying items you don't really need.

There are hundreds of books, magazine articles, and Internet web sites about getting rid of credit card debt. Some of them offer sound advice about the psychological aspects of money and spending that you'd do well to consider.

If psychological factors influence your spending, credit reduction programs are like using perfume to cover body odor: they will treat only the symptoms, not the root cause. Working on the psychological aspects while taking steps to reduce debt will greatly increase your chances of long-term success.