You’ve probably heard about people using drugs or alcohol to self medicate. They use them to make up for some “hole” in their psyche or in their lives. As an example of this, a person might use alcohol to self medicate because he or she didn’t have a father growing up, which left a hole in their lives that they try to fill by drinking.
Your spending habits
If you have tried to change your money habits but find that you end up falling into debt over and over, you might be handling this the wrong way. Your problem may be your mindset and not your budget. Many financial advisors say that we have a natural tendency to resist bad emotions and so we medicate them. Some people choose to drink, some choose eating and others choose money – in the form of overspending.
A painful path
The path of getting out of debt can be especially hard for people who have overspent because whatever they purchased they thought would make them feel better. There are emotional triggers to spending that you need to be aware of to make sure you don’t fall into an emotional money pit. Here are four of them.
Escaping from grief
Suppose you had a divorce or a death in the family or some other hard experience. This can leave you burdened with emotions of loss and sadness. When you splurge on yourself, it can feel good – at least temporarily – as this gives you a short bit of relief from those heavy feelings of grief.
Getting away from guilt
A second emotional trigger that can lead to overspending is if you use money to try to eliminate guilt. Maybe you believe you hurt someone or let someone down. In this case, you may want to give that person something to gain forgiveness. Parents can feel guilty because they are unable to give their kids the upbringing they would like to have given them. In this case, parents might end up spending impulsively on tings they can’t really afford such as an expensive, spur-of-the-moment vacation.
If you’re feeling very lonely, this can be a big reason behind impulsive spending. It’s just a way for you to interact with someone even if it’s just a friend or sales clerk. Most of us love to get together with colleagues or friends over coffee, drinks or dinner. Saying “let’s take a walk” just isn’t as much fun as saying “let’s do lunch.” Other people may spend money because there’s no one to share time with so they direct that loneliness – and money – into expensive experiences to keep them from feeling lonely.
Let’s suppose that you didn’t get that promotion you thought you deserved or an important relationship ended. If you were typical, you would feel rejected or disappointed. This is because there was no way that you could have controlled the other person’s life. However, you might try to cure that feeling with money as it’s a way to immediately have some influence over your experience.
How to change those behaviors
If you find that you buy something you don’t really need and will ultimately cause you a financial problem, this is a big clue that you’re doing this for some emotional reason. If you buy things you never use, this can also be a sign of emotional spending. As an example of this, if you spend hundreds of dollars a year on clothes and end up with a closet full of stuff you’ve never worn, you can just about figure out that there’s something about the shopping process that was emotionally gratifying since your purchases – in this case the clothes – didn’t really hold your attention. If you find that you’re overspending after a bad experience, go ahead and cut yourself some slack. On the other hand, if you see there is a pattern of irrational, emotional spending try one of more of these steps.
Chart your emotions and your spending
When you track your spending to create a budget, go one step further. Write down what you were feeling when you made each purchase and not just what you spent. You might find that some specific emotion had you pulling out your wallet more frequently.
The act of mindfulness means concentrating your attention on your bodily sensations and then understanding what they meant. For example, if you practice this you may learn that when your stomach muscles tighten this indicates fear. If you are mindful of these emotions, this can stop you from impulsive actions. If you are able to think, “I’m feeling bad or sad,” when you get to the checkout counter, this might keep you from making that purchase.
Eliminate money from the equation
If you learn you are spending money out of loneliness, guilt or other emotions, this means that you’re basically attempting to invent experiences and memories. There are free ways that you could do this instead of buying something. You might have a night at the movies or stage a potluck dinner with your friends.
Consider getting help
Finally, if you don’t feel that you can alter your behavior on your own, you might think about getting some therapy or joining a support group such as Debtors Anonymous. Here’s a brief video about DA and how it has helped people.
As an alternative to DA, you might consider consumer credit counseling. You should be able to find a credit-counseling agency in your area or if not, there are a number available via the Internet. If you choose this option, you will be assigned a counselor who will review your finances and work with you to develop a budget. A good consumer credit counseling agency will also have literature available that you could take home and that might help you with your spending. The best credit counseling agencies charge very little or even nothing for their services. So going to one of these for help could be a no-lose situation.
Or use one of these debt solutions.
- Snowball your credit card debt
- Borrow money to pay off your existing debt
- Borrow from your retirement account
- Do a balance transfer
- Find ways to earn more money that could be used to pay off your debts
- Create a debt avalanche
- Get a peer-to-peer loan
- Sell items on eBay or Craigslist
- Negotiate with your lenders for better terms
- Settle your debts
- Make money online
- Sell crafts or vintage items on Etsy