The holidays are over and many of us have gone overboard on spending excessively on expensive gifts, gadgets, and vacations. I became caught up a bit in the trap and indulged myself with a couple of gifts that I thought I deserved. Now I am paying for them while closing all the gaps to avoid any repetitive behavior. You might ask, how do I do this? Simply by using cash to pay for everything, sticking to my budget and refusing to use credit unless I have the money in my account to pay it off. Many of us are spending our paycheck before receiving it. No wonder we are always in debt. As a result, many of us have found ourselves in the proverbial hole, broke and stressed out from maxed-out credit cards with high-interest rates. These irrational behaviors not only affect our mental health but that of our entire family as tempers flare because there is not enough money for food or paying the bills.
ROOT CAUSES OF OVERSPENDING
There is often a root cause that is associated with compulsive behaviors. According to Neuropsychology Review, compulsive behavior is repetitive acts that are identified as having the feeling that you must do something, although you know these acts are detractors from your goals. Developing positive money habits starts in the mind because this is where our thoughts originate. Each day we decide about our lives by the things we do with our money. How we spend our money speaks volumes about our mental health. Have you ever observed that when someone is hurting, the first thing they will do is buy something, whether ice cream, clothing or something else, which they think will numb the pain? These are distractions for the real reason behind our hurt and pain. Have you ever stopped to think about the pain and your feelings surrounding it? This is a great place to start. Acknowledging our feelings and working through them with the help of a friend or a professional counselor. When our minds are unhealthy, it is very difficult to be consistent in our behavior.
Some of us grew up in dire poverty where we lacked everything that money could buy and this creates an indifference towards money and spending. No one taught you how to have a positive relationship with money because there was barely enough to buy food. Therefore, it creates a desire to earn money to satisfy the lack of those things they deprived you of while growing up. Once you are old enough to earn money, your thoughts become focused on buying goods and services to satisfy the perceived lack. There is nothing wrong with this. However, savings should start immediately because your focus should be on creating a different future than the one you had. Designer clothing, cars, and gadgets will depreciate. However, solid savings or investment funds will appreciate. Guess what? You will have all the money you need to splurge on anything you need because you have earned it. You will be the lender instead of the borrower.
They taught those who had access to great wealth from an early age the principle of savings. Some affluent parents gave birthday presents of stocks and bonds to their children. This is a prime example of teaching them how to invest in their future at an early age. Most of them developed a healthy relationship with money. However, some fall prey to addictive behaviors; eating disorders, drugs, and sex addictions because their childhood might have been disruptive. They felt their needs for love and busy parents who were more interested in creating wealth than parenting ignored them. Therefore, they indulged them with high-end gifts, such as toys, cars, designer clothing, and took expensive exotic vacations where they invited their business partners along while they left the children unmanaged. Thus, they develop a very unhealthy relationship with money and indulge in negative practices, which serves as a mask for the scars they had.
CREATING A BALANCE BETWEEN SPENDING AND SAVING
First, we must have an excellent knowledge of the benefits and rewards of money and also the negative effects of money. To do this, one must determine their motive for spending or saving money. One must carefully evaluate whether the benefit of purchasing a certain product outweighs saving. It is worthwhile giving it some thought by considering the implications of purchasing that item. Here are some questions you might ask yourself before spending money on small or large purchases. Can I afford this item? Do I need to spend this money right now? How important is this to me? Is it within my budget? What am I giving up to get this? Is it better to purchase something of a lesser value? When buying large items, it would be a good idea to plan the purchase by saving towards it. Only purchase it when you have saved up enough money to do so, otherwise, you will become saddled with high-interest credit card debts that will take years or a lifetime to repay. A good rule of thumb is if you are struggling to pay your bill, then you cannot afford to buy anything unless it is a dire emergency.
HOW DO WE GET OUT OF THIS SITUATION
We must develop a healthy relationship with money by recognizing its value and also the power of money. When we are in control of our finances, it gives us a sense of peace and security because we never have to worry about having enough money to take care of our responsibilities. However, when we squander our money mindlessly, we are devaluing money. When we save and give to those in need, money appreciates.
I am not a financial guru. However, I have based my suggestions on my observation and my experience with money. It is always a good idea to be mindful of your income and your expenditure. Never spend more than you earn. Instead, cut back on something or deprive yourself of buying that new item of clothing, furniture or dining out and save that money because it is a better decision.
CREATING WEALTH
Save a penny, earn a penny! Let savings become a routine in your life. Try to save something from each paycheck. It might be just $5 or $10, but it adds up. Don’t charge it, pay it! It is better to settle for a peanut butter sandwich than a prime steak that will burn you later.
Focus on your feelings and try to identify what is the real reason behind the thought to overspend. It is not about loving money, but about loving what money can do for you. It relieves stress by taking the pressure out of living because you are not in debt and are in charge of your income.
