Improve your thinking, improve your financial life. Does that seem possible? Yes it is possible and the two go hand-in-hand. At one point or another, we’ve all let our mood dictate how we spend our money. But just because we’re guilty of this behavior doesn’t make it right or mean it’s good for us.
I’m all about financial literacy and changing our money mindset for the better. It’s been my observation from conversations about spending that some people tend to overspend or give into impulse buying for two reasons. Sometimes they’re dealing with an emotion like depression or stress, and other times they haven’t learned the value of being content.
Of course, there are other reasons. But for the purpose of this article, I’ll focus on how these two factors specifically impact our financial life, as well as why we spend during these times, and what we can do to change our thinking.
Depression, Boredom, Stress (and every emotion in-between)
There’s something about a bad day that causes many to steer their car in the direction of a mall or shopping center. Even if they don’t spend a lot of money, most people find that treating themselves can quickly lift their spirits and help them get through a rough patch.
Emotional shopping is a form of therapy for some. Since I’ve been guilty of this, I know and understand exactly why it happens. Instant gratification has a powerful psychological effect, and shopping can take our minds off our troubles and help us feel better. The problem with this type of pick-me-up is that it doesn’t last. You might experience an emotional high that lasts for the next few hours, or at the most, into the next day. But life will snap you back to reality.
The main issue with retail therapy is that it creates more problems than it solves. Most shoppers only think about the present and not about the long-term consequences of spending. What’s more, shopping is nothing more than a distraction masking the real issue. Buying a new pair of shoes can put a smile on your face, but the purchase doesn’t address the root of the issue. The underlying problem remains after the purchase is complete, and sooner or later you’ll deal with it again.
If you start a pattern of shopping whenever life gets tough, this bad habit could become a security blanket for whenever you want to escape reality.
You can’t improve your finances until you stop letting emotions control your spending. There are better ways to cope. Not only should you explore why you’re feeling depressed, stress or overwhelmed, you should also look into healthy ways to deal with these feelings. Rather than shopping, learn other ways to distract yourself. Go for a walk, rediscover a hobby, get in touch with your crafty side or call a friend.
Dissatisfaction With What You Have
Rarely does anyone get everything they want and our life doesn’t always turn out the way we envision. Therefore, you can probably think of several ways to better your life. Maybe you wish for higher income, a newer car or a bigger home. There’s nothing wrong with setting goals and making moves to improve your lot in life, but much good comes from learning how to be content with what you have.
Some people are willing to do whatever it takes—even ruin their finances—to make it appear as if they are living the “good life” because they’re dissatisfied with their life. I don’t like to judge because I know the power of financial peer pressure and the pressure to keep up. However, there’s a difference between occasionally giving into financial peer pressure and making a practice of it.
If you spend money because others spend or because you want to be accepted by others, changing your mindset is the only way to fix your financial life.
How do you do this?
It doesn’t happens overnight, especially since contentment—which is a state of happiness or satisfaction—doesn’t come naturally for some of us. Materialism is all around us. You might not consider yourself materialistic. But if you have coworkers, friends or relatives who enjoy nice things or spend without limits, you could become envious and start wishing for a similar lifestyle. We’re only human and we can’t always control how we feel. Realize, however, that you can get into trouble if you let these thoughts take up too much space in your head. Being content doesn’t suggest complacency or staying in the same place forever. It means finding happiness in whatever circumstances you’re in, while working toward self-improvement.
To learn contentment, be realistic. The truth of the matter is, some people who spend crazily aren’t really in a position to do so. Not everyone has the same goals or mindset about money. Some people want to have fun and they never think about the consequences of spending. They have no problem using a credit card to finance their lifestyle. And if they’re using cash, it might be at the expense of growing their emergency account or saving for retirement.
So what if you can’t eat out every weekend or take a vacation every six months. Keep your mind and eye simple by reflecting on your financial goals. It also helps to be selective when choosing associates. For example, limit contact with people who brag about their lifestyles or make you feel inferior for having less. Instead of letting others take the lead in planning group activities, take the initiative and suggest cheap or free activities. Additionally, spend time with like-minded people. It’ll be easier to stay content when your peers share your money views.
You are in control of your financial happiness. You might not have the best financial circumstances, and maybe you’ve made a few poor decisions in the past. But like most things in life, you can improve your money. This starts with letting go of bad habits and adjusting your financial views.