Many people struggle to get a grip on their finances. But in today’s uncertain economic times, you can’t risk being part of the 54% of US adults who don’t have savings to see them through unforeseen circumstances.
Will you survive financially if something happens? Chances are you’re part of the 55% of consumers that live paycheck to paycheck.
What if it can be easier to take back control of your budget? Here’s our suggestion: Understand the emotional side of money spending.
When you know WHY you make decisions you regret, it’s easier to change WHAT you do. So, let’s start digging!
And guess what. What you buy has nothing to do with why you’re buying it. Your state of mind determines what you do with your resources. Your values drive your decisions and actions.
If you value feeling better more than you care about saving money this month, you’ll easily commit to a purchase.
In general, there are more than 27 different emotions that can affect us. They fluctuate all the time, and they’re difficult to control. So you may think emotional shopping is inevitable. That’s not true.
Any of these emotions can spark a notion to shop, much stronger than your commitment to your budget guidelines:
The reason why self-help books stay popular is that they do work if you put your mind to it. The following steps require dedication and hard work. But they’re worth putting in the effort if you want financial freedom.
Above, we mentioned various reasons why people tend to overspend or buy on impulse. You need to analyze your emotions to discover the root of your problem. What triggers your spending? Monitor yourself over a few weeks by making notes in a diary:
Recurring patterns will help you identify what you’re trying to escape or which positive emotions you’re trying to recreate.
Different motivations will require different solutions:
Some solutions—such as seeing a therapist—may only bring results over time. That doesn’t mean you should keep shopping as you do at the moment. Implementing healthier habits can help you save money, even if you’re still struggling with your emotions.
When you keep making better decisions, you’ll build new neural pathways in your brain. This will make it easier to make the right decisions.
Healthy habits include:
Don’t follow these steps out of guilt; find motivation in imagining the freedom you’ll experience. Your budget doesn’t have to be at the mercy of our emotions. Imagine smiling in satisfaction because you don’t count the days until the next paycheck anymore.
John has been a freelance writer for the past 3 years. He worked for 4 years as a Mortgage Consultant and a Financial Advisor. He also worked for 2 years as a Loan Manager for a medium sized company that handled bad credit loans, car loans and personal loans. We are excited to have John in our team!
John writes about Finance, Philosophy, Money Saving Tips and much more. He is a proud Member of Financial Advisers Australia (AFA) and has Cert IV in Financial Services.