The Psychology Behind Money And Spending

As everyone is in a spending frenzy for Christmas gifts, many will be concerned as their shopping bags fill up and their bank balances drop. Although December may be a month where there is a heightened amount of spending, it is actually on a daily basis that people are spending compulsively. From purchasing an impulsive snack to an unnecessary splurge of clothing that leaves you in debt come month end.

Behind all this money dropping is a psychological behaviour that can be altered with the right mind frame, it could leave you with savings instead of debt collectors knocking on your door.

One of the reasons people are feeling more and more comfortable to spend their money is due to some of our technical advances. As shopping releases endorphins, that happiness is counteracted by the guilt and stress that comes with physically handing over the cash.

However, people hardly pay with cash anymore as most shoppers use credit cards or purchase online with a mere click of the button. Basically, the elation you feel when buying something is removed from the painful realisation that you are spending money. Try using cash to purchase goods to reduce the amount you spend.

A step in the right direction would be to determine how and why you shop. If you are compulsively shopping for your self-esteem until you are broke then that is a problem.

It is understandable why so many people are in this predicament though as every day we are bombarded with TV commercials, billboards, banner ads and radio advertisements encouraging us to SPEND SPEND SPEND.

Advertisements do not just sell a product or service however, many ads sell emotional appeals that may make people feel they need it to be happy or make their family happy. Compulsive shopping is also a result of social pressures and a warped sense of what we ‘need’.

So perhaps it is time to don Dr. Phil’s thinking cap and make some alterations. One of the first things to do is to recognise your self-worth irrespective of what you own or what you wear. This will allow your self-esteem to rise above relying on material goods.

A safe backup plan would be to organise debit ordersso that everything you need to pay is sorted in the beginning of each month. Then with the right calculations have a portion of your salary go straight into a savings account that will make you happy as the numbers rise (Try to leave this card in a safe place at home).

The remainder of your salary will then be for spending. When you do take a trip to the shopping mall try to leave your credit card at home and pay with cash. If you do have to pay with your credit card then purchase small items, things that you will be able to pay off, and save for the things you cannot afford. Keep in mind that a bargain is not truly a bargain if you never needed it in the first place, which is just unnecessary spending.

Image attribution: NoHoDamon

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My name is Terrence Stoker, I am a metro man that loves browsing the shops for good quality suits. I rely on debit orders to ensure I pay my bills on time and have the opportunity to blow the rest of my salary at the likes of Hugo Boss and Armani.

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