The weather is warm and in the United States we are about to start enjoying some of the national pastimes of our country. We love things like baseball, apple pie, the 4th of July, and grilling out in our backyards. Oh yeah, and we also LOVE spending money. In recent years, I’ve noticed that spending is more than just making a purchase here and there. It’s almost a ‘crack’ like addiction, whether you wait for that Amazon package at the door or to take a photo of your tricked out new ride to post up on Facebook. Like it or not, many Americans are addicted to the drug of buying ‘stuff’. Why is this and how can you get your patterns changed on the home front?
It seems pretty apparent that ease of access to drugs can make a user want more of them. In our spending patterns, the ease of credit, access to our cash, and online transactions with programs like PayPal have made it simple to fuel our spending addictions. The visibility of our friends, work colleagues, and family on social media outlets such as Facebook can trick our brains into thinking that our peers are living better lives than us. It appears that they take better trips, or have nicer cars and bigger homes than we do. So, we begin to ask ourselves this question, “I work hard. If they can afford and get these things, then why shouldn’t I be able to get them as well?” This is very dangerous thinking if you ask me because the drug like high of a new purchase only lasts for a short period of time until you begin searching for the next thing to make you feel good about yourself.
Part of this has to do with the effect of ‘money illusion’. When people begin to make more money, seeing those dollars in the bank don’t really provide the brain with a tangible reward. Thus, you trick yourself into thinking that making purchases will create a substancial reward within your brain for the hard work that you do every day. This is why when you get a bonus or pay raise at work you really shouldn’t be using the money to buy more things, and yet, most Americans will make some type of purchase or take some type of trip to reward themselves for the good job done. A pat on the back, a new title, or a gold star simply doesn’t work for most folks.
The long term problem with spending money to buy ‘stuff’, is that in the end it really won’t make you happy. Think about the analogy of going on a diet and trying to eat healthier. You work really hard and for two weeks you stay away from all of the bad things like desserts, fatty foods, and sugar rich sodas. Then one evening you have this tremendous craving for something you know is not good for you. So, you stop by the local fast food joint and get a cheeseburger, French fries, and a milkshake. For about 30 minutes, you feel on top of the world and then you come crashing down feeling terrible about yourself and what you did to break your program. The same phenomenon happens with spending money. It can make you feel good for the moment, but it won’t make you feel good when you see the bill the next morning.
It’s not easy to fix spending problems, but the start of the process begins just like exercising or dieting where you need to trick your brain as you begin the program. You have to imagine how good you will feel when you have money in the bank. You have to visualize how positive your attitude will be when you don’t have to work to pay your obligations. You need to set goals to put you on a course for what ‘wealth’ really means to you. Drugs can be extremely dangerous because of what they can do to our bodies. Spending is no different and if you are addicted now it can create all kinds of negative effects on your body. Make a smart money move today and ask yourself these three questions every time you begin to make a purchase:
- Do I Really Want This?
- Do I Really Need This?
- Can I Afford This Both Emotionally and Financially?
If it can’t absolutely pass the acid test, then skip the purchase and you won’t wake up with a spending hangover the next morning!
CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®
Editor in Chief of Your Smart Money Moves
Co-CEO and Founder of oXYGen Financial, Inc – The Leaders in Gen X & Y Financial Advice and Services
Ted Jenkin is one of the foremost knowledgeable professionals in giving financial advice to the X and Y Generation.
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