Our emotions play a large role in our spending habits and the relationship between money and emotions are even more prominent during the Christmas shopping season.
There are two main variables that come into play in how we spend money; intellect and emotions. While emotions in and of themselves aren’t a bad thing, being emotionally led in your money matters is downright dangerous. I like buying things as much as the next guy. But here is what I like even more….. falling asleep at night not worrying about bills or when I do find something that I really would like to purchase, purchasing it without that funky feeling at the bottom of my gut.
Many times we conjure up excuses of why we need to purchase something for justification and to try to trick our brains into peace, “I need a new car, because my current car is 4 years old, I just had to replace the brakes so I’m better off buying a new car rather than putting more money in my current car.” Sound familiar? A new car will probably cost you on average $200 - $500 of monthly payments. Do you really think you will be spending that much on car repairs each month for the next four years? If so then by all means it makes sense to buy a new car. But that’s probably not the case and stretching your current car out another 3-6 years is probably very doable and wise.
What are money and possessions to you? Do possessions bring you the feeling of power, a higher social status, envy from others, confidence, shopping highs? What if instead of looking at possessions in these terms, you started viewing savings and sound investments as peace of mind, empowerment for you when you are in a jam, empowerment for you to be able to help family and friends who are going through a rough time, the ability to make guilt free and worry free purchases?
You see, there are a lot of people out there who are what I call “wealth posers”. They have the shiny new cars, the house that can be featured on HGTV, the newest tech in communications and A/V. They may be the envy of their neighbors, friends, family, and acquaintances; but what these other people don’t see is the monthly bills, high amount of debt, nonexistent or dwindling savings, and the restless nights worrying about money that these wealth posers also have. Wealth posers can come in the form of a person making $20,000 a year or a doctor making six figures. Believe it not, wealth posers can also be people who bring in millions of dollars a year. In short, a wealth poser is a person (no matter their income level) who appears to be wealthier than they actually are. People with real wealth/financial stability usually got there by letting their intellect lead their money affairs, whereas wealth posers are usually emotionally charged. A wealth poser overvalues the positive emotions that purchasing brings (whether it’s direct emotions such as the excitement of having a new toy or indirect emotions such as feeling like other people will envy them if they buy the new toy).
How do you manage your money? Do you seek financial stability/freedom? Do your emotions make your financial decisions? Are you a wealth poser?