What Your Spending Habits Say About Your Personality

04
August

For almost everyone, psychology plays a role in our financial decisions, and whether we realize it or not, buying anything that is really unnecessary may come from the entrenched notion that we deserve a “treat.”
Advertising in any form reinforces this idea, and uses luxuries to promote a lifestyle that appeals to us because, in this case, there is no pragmatic reason for buying the product that they market. At the same time, we feel the need to be one of those people who are successful and automatically entitled to live the “good life.”

Home ownership has long been touted as “the American dream,” but recent events show that it is also an “impossible dream” for some of us. Rather than being frustrated and stressed out by this realization, those with a positive outlook will also see that, like other things in life, home ownership is also a trade-off. A couple may rent their home or apartment for years, knowing all the while that they will never own one brick or shingle. At the same time, they may never have to worry about repairs, shovel snow, rake leaves, or mow the lawn—as stipulated in their lease.

“Retail therapy” is a well-recognized, deceptive remedy that many people prescribe for themselves, and it is not unlike the yearning for “comfort food” that we sometimes experience. It has not been defined as a psychological term, but at the same time, none of us can be certain that we are immune to it. For example, it is said that an accountant splurged on a boat, probably against his better judgment, and actually named the craft “Negative Cash Flow”!

At other times, our ego may influence our choices, and we make a significant purchase not so much to please our ourselves, but to show our neighbors, friends, and family members that we are doing just as well as they are. This bad habit has been around for decades, and our grandparents referred to it as “keeping up with the Joneses.”

You may begin to wonder if you have grown careless and irresponsible in handling your finances, and these are signs that you might be right:
● You find yourself buying things that you really don’t need and cannot afford.
● You spend virtually every Saturday at the mall as some form of recreation and, by example, teach your children that this is a “cool” thing to do.
● Most of your enjoyment comes from the act of shopping, rather than the purchases you make.
● Once you bring your purchases home, you realize that you neither need nor want them.

Long established habits are hard to break, but you can develop the right outlook on your spending if you do the following:
● admit that the problems exists,
● be sincere about wanting to improve the situation, and
● take a good look at the state of your finances.

To succeed in turning things around, you must determine exactly whether you tend to overspend because you are stressed, depressed, or overly concerned about your appearance. While shopping is something we have to do, you can also find more suitable remedies to counteract these feelings and bring your spending under control.

To determine what your financial personality really is, take the following steps:
● Think about your parents’ attitude toward finances when you were growing up, because it helped to shape your outlook on money matters at well. To get back on track, you may find that you have to reject some of those earlier ideas.
● Determine your long-term and short-term financial goals, and this will motivate you to curtail your spending. If you tend to be too cautious with your finances, realize that you may be rejecting some worthwhile opportunities to improve your situation.
● Ask yourself if there were any traumatic experiences in your childhood that affect the way you deal with your spending today, and release those pent-up emotions. If you were over-indulged, you may have been shocked to discover that life is not one continuous Christmas morning, and if you were deprived for some reason, realize that this was something that happened long ago, and you are now in control.

This post was written by

jason – who has written posts on Budget Clowns.
Father of three and married to a lovely women. Always looking for ways to save money, and invest it properly for my children's future.

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