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Don’t Make Excuses – The Psychology of Debt and Spending

May 9, 2011 · 9 comments

in Personal Finance

Have you ever sat down and thought why you do the things you do – the things you do as a part of everyday life, the decisions you make based on your own life experiences and lessons?  We all are born into a unique family dynamic.  This dynamic, along with the influences of friends and the media, all help shape the adult we become. Along the way, our views toward spending, child rearing, education, and more are formed, without even a thought.  Maybe you were raised with a family that refused to spend a dime on anything and end up becoming frugal yourself.  Or, instead of becoming frugal, you go wild with your first credit card, trying to make up for a lifetime of being denied.

If, in the above example, you go down the over-spending route, you will probably buy a lot more than just items you don’t need. Sure, you might be nicely dressed and possess the flashiest car.  However, bankruptcy and debt might just be looming around the corner if such spending goes unchecked.  On the other hand, by choosing extreme frugality, you may end up bitter and angry because you may feel you’ve passed up a lifetime of experiences and convenience.

Some of these extreme habits can be incredibly hard to break.  Most of our ‘core’ behaviour patterns have a deep history, which may stem from either positive or negative circumstances. Regardless, once a person is an adult, it is their responsibility to address these issues instead of just saying “it was how I was raised”.

There are millions of articles on the internet on how to stop from spending.  However, the answers are rarely as easy as they sound. For instance, many people have a deep emotional component to their spending.  For those individuals, simple tactics such as cutting up credit cards may not be enough.  Perhaps you need to look deep down and talk with someone about the root cause of your spending. Otherwise, short term actions may just act as a band-aid instead of a cure. In some cases, just getting another person involved can help, whether it is a friend, spouse, co-worker, or counselor.  Being accountable to others is a great way to change behavior, and sometimes talking about an issue can help you realize the source of a problem.


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