The Psychology of Spending
When most people examine their financial problems, they tend to focus on the need for greater income so as to pay off their debts and breathe more easily each month. Depending on your current circumstances, you may indeed need to find ways to increase your income over time in order to make things easier for you and improve your standard of living.
However, you should not blame all your current financial problems on low income at the expense of examining your own habits and motivations. More often than not, a lack of personal self-control is a major cause in financial distress. Most people tend to spend all of their paychecks each week or month, and, even worse, they spend even more than they earn by using their credit cards and get consumer loans.
The net result is that people in the United States simply do not have enough savings, and far too many people are living from paycheck to paycheck under incredible stress. They often have no idea how they will pay off all of their debts, they don't understand how they got to this point, and they may simply try their best to make the minimum payments and not think too much about the big picture.
However, if self-discipline is a major contributor to financial success (and we believe it is), then we need to examine some of the psychology of spending. Why do people spend so much and how do they end up in debt? One simple reason is that people have learned to associate spending money with pleasure. It is like an addictive drug that gives a person a high temporarily until the buzz wears off and another item has to be purchased.
People often go shopping in order to escape from their daily or long term financial problems, family relationships, or any other issues they may be dealing with. They may learn to associate shopping with the idea of alleviating depression or sadness. The problem is that they are simply digging their hole significantly deeper which will lead to more financial problems, more stress and depression, and so on.
Recognizing this pattern is a crucial first step, but you have to learn to break these habits and instill some self-discipline in your life. Consider the impact of your actions. Learn to think about long-term consequences and avoid short-term gratification that will lead to long-term pain.
About the Author
Jacob Lumbroso is a world traveler and an enthusiast for foreign languages, history, and foreign cultures. He recommends http://smallestdigitalcamerashop.com/ for one looking to find the smallest digital camera shop.
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