Humans aren’t great at balance. We tend to think, feel, talk, and act in extremes—usually to our detriment. Living our life in the outer limits can be deleterious to our health—physically, emotionally, relationally, and financially. When we are too restrictive or too indulgent, we create a world of pain for ourselves and those who care about us.
“Spend less than you make” is sage wisdom. Like many simple things, it’s seldom easy. Motivations of spending behavior vary by person and circumstance. Why do people buy things? Competition. Comparison. Denial. Avoidance. Anger. Anxiety. Happiness. Grief. Disappointment. Envy. Distraction. Loneliness. Inadequacy. Insecurity. Fear. Sadness. Entitlement. Communication. Reward. Punishment. Self-soothing. Self-sabotage. Impulsivity. Fatigue. Boredom. To buy love. Pressure. Difficulty saying “no.” People pleasing. Fear of missing out.
To appreciate an individual’s financial psychology, look to the person behind the behavior. Consider the life context: personal history, current environment, and social surround. When people spend money, they are trying to meet some need. When spending too much is problematic, identify the core need at the crux of the purchase. Then, step back and consider more constructive, creative ways to have that same desire satisfied.
A phenomenon that garners less attention than overspending is some people’s struggle to part with their money. They are scared to spend. Buying inhibition is more common and has the potential to be more problematic than you may think. Some people are reluctant to use their money even though they rationally don’t need to be. Dynamics related to anxiety and control often underly extreme spending reticence. Often, people who exhibit these difficulties have a history of financial trauma. The brain of someone who has experienced scarcity or deprivation may struggle to hit refresh to recognize that they are living in a new context with different resources. Thriftiness that was previously necessary and adaptive is no longer needed, but the mind can’t register that old threats are no longer there. These individuals are trying to fight historic financial battles that are over. They are unable to see that they have outgrown what was once adaptive. Old tendencies have expired. Instead of helping, their longstanding habits and proclivities for preoccupation, over-conscientiousness, and hypervigilance are shrinking their life.
Peoples’ financial choices can provide an unvarnished reflection of what they believe they deserve. In some cases, peoples’ reticence to spend money is related to unconscious self-punishment. The individual who is unwilling to pay for something they need or something that would create a basic degree of comfort that they can afford is exhibiting money masochism. Often core struggles with themes of guilt, shame, and worth live underneath self-suffering stinginess.
How do we get it right?
Where is the middle ground?
The money messages we receive are confusing. Our brains are wired to make good money decisions hard. A combination of experiential learning, self-awareness, support, self-compassion, and practice is how we pave the path to where most people ultimately want to go: a meaningful life. It’s the journey to funded contentment. The good news: it’s possible for everyone.
Should someone else read this?
Don’t miss pure-signal-no-noise posts like this one:
If there is someone in your life who would benefit from things like better sleep, improved relationships, strategies for managing stress, and becoming more self-aware invite them to the inbox party. Finding Joy may be the gentle nudge they need to help improve their EQ.
For more of my musings, you can connect with me on Twitter, IG, and Linked In.