The Psychology of Spending
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
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.