Health & Wellness Articles

Turn Money Problems into Rewarding Solutions

Got Money Problems? Find Peace with Your Paycheck

28SHARES
Got money problems? These days, when many people earn the equivalent of 4 gallons of gas per hour, who doesn’t?

For many people, money problems go beyond coping with rising prices or tweaking your budget to keep your expenses within your means; they're a way of life. No matter how much money you have, it's never enough to make you feel happy, secure, or satisfied. Dealing with money can become incredibly complex and difficult, too. It’s very easy to want more of it than you truly need; to spend more of it than you have; or to expect it to solve problems that it can't. In fact, it's not just easy to get caught up in problematic spending habits—it's almost expected of us.

The advertising and credit industries have done amazingly well at transforming money (and all the things it can buy) into potent symbols of personal power, status, success, and even personal identity. If you want to be successful, buy a fancier car! As a result, the difference between what we need and what we want has become harder to define. The connection between who we are and the things we have has become much more confusing than it needs to be. And the ability to manage money and spending with simple math and logic is often lost in a sea of strong feelings, needs, and insecurities.

If all of this sounds similar to the issues many people have with body image and emotional eating, that’s because it is.

There’s an old saying about money that you often hear in self-help circles: “If the only problem you have is a money problem, then you don’t have any problems.” What this slogan is pointing out is that most problems with money aren’t really money problems, and you can't solve them by getting your hands on more money. The real problems are the attitudes, expectations, feelings, and assumptions we have about ourselves and the things we desire or think we need.

We don’t make up these problem-causing assumptions ourselves. We pick them up from the people and culture around us. Unfortunately, it’s more difficult to pick up the strategies we need to inoculate ourselves against the constant barrage of advertising, easy credit, and social pressures that make it so easy to use money and spending in self-defeating ways. But you can do this for yourself if you’re willing to do a little work.

The feelings and thoughts that lie beneath bad money habits can run the gamut from depression, anxiety, loneliness, boredom, and other emotional problems that lead to shopping as "retail therapy,” to some fairly simple and very common “mental errors” we’re all prone to make in the moments when we decide what to spend our money on.

The rest of this article will focus on two of these "mental errors" and ways to combat them. If you feel like you’re struggling with deeper emotional or psychological issues that affect your financial situation, you may find some additional ideas in SparkPeople's emotional eating articles—just substitute “spending” for “eating.” A good place to start would be with our Mind Over Body articles.

Spending Mistake #1: Comparing Apples to Apples
Do you frequently find yourself passing up the healthier foods in the grocery store because they’re "more expensive" than junk food, only to blow $25 to take your crew out for fast food without worrying about it, because it’s cheaper than going out to a “real” restaurant? Or maybe you’ll happily spend $100 for that great blouse that’s on sale because it’s just perfect for a special occasion but can’t justify spending the same amount of money on three or four pairs of everyday jeans, because it would “break the budget.”

These kinds of “irrational” spending decisions account for much of the over-spending that gets people into money trouble. What’s going on here? Are you just rationalizing what you really want to do, or falling victim to impulse buying? Probably not. You’re doing what any reasonable person would do—comparing the costs of similar items and choosing the deal that looks best. Unfortunately, you’re comparing the wrong things.

Social scientists have found that people naturally compare things when making these kinds of decisions, and usually choose the better financial deal. The problem is that our minds are “wired” to make simple, immediate comparisons (the cost of organic apple A to conventional apple B to the apple-flavored fruit snack; or the money we’d “save” by buying the blouse on sale versus the regular priced jeans). But these simple comparisons often don’t allow us to see the larger picture. In order to make the best financial decision, we need to consider several factors—not just the simple, immediate comparisons our brains want to make. But how?

The solution is simple: Give yourself time to do it before you’re in the situation where the buying actually happens. You can easily see that you’ll be able to afford the healthier groceries if you skip one trip to the drive thru, and that $100 spent on a blouse for one special occasion doesn’t really stack up well against several pairs of pants you can use on a regular basis for months, no matter how great the sale price is. But you’re not likely to think along these lines while you’re actually wandering through the store—your brain just doesn’t go there unless you push it. Luckily, you can retrain your brain to keep the larger picture in mind with these simple action steps:
  • Sit down to establish your spending priorities, and then assign a budget amount to each priority. Do this at the beginning of every month, week and/or shopping trip. Make a list of what you need and take it with you when you go shopping. Don’t buy anything that isn't on the list unless you’ve bought everything else on the list—and have money left over.
  • Institute a “cooling off” period before every unplanned purchase (or purchase that costs more than you've budgeted). Don’t let yourself buy something on the spot. Place the items on hold, give yourself some time to think it over, and go back later if it still makes sense to you.
  • Focus on the right number. If an item on sale is calling your name, don't focus on how much you'll save, focus on what you'll have to spend. Ask yourself if this item fits in your budget, and if not, decide what you're willing to take out of your budget to make room for this extra expense.
  • Imagine you're shopping with someone else's money. Ask yourself whether you’ll be able to justify spending their money on the item you want to buy. If not, put it back on the shelf.
Spending Mistake #2: Confusing Wants and Needs
When you live in a culture that bombards you daily with hundreds of emotionally manipulative images, carefully designed to convince you that you need all kinds of dubious things in order to live the good life, your first line of defense is to have a strong sense of what you really need. Some of your needs are obvious: food, shelter, clothing, transportation, and so on. You’re probably good at prioritizing these needs and budgeting your money so they are covered before you spend on discretionary items.

But there’s a gray large area where needs and wants start to overlap. Do you need a $400 designer purse, or will the $40 one do the trick? Just how many movies or restaurant meals do you really need each month? There’s not much point in working hard for the money you earn, only to deprive yourself of using it to have some fun or buy some things you want even though you probably don’t “need” them. Obviously, the point here is moderation and good judgment—not being puritanical or saintly with your wages.

If your income is reasonable and you still have persistent money problems, then your wants are influencing your buying decisions more than your actual needs. You'll need to work on defining these two categories more clearly for yourself. How?

The solution: The first step is to figure out how big this problem is and how it manifests itself most often. One good way to do this is by taking an inventory of your possessions. Then you can make some decisions about what, specifically, needs to change to keep your spending more in line with your budget and priorities.

Action steps: Spend an hour or two going through the possessions in your home, including closets, drawers, and storage areas, and pull out all the things you’ve purchased in the past and only used once or a few times. Put all these things out on the floor, in piles according to what type of item they are, such as clothing, shoes, toys, kitchen gadgets, electronics, books and CDs, sports equipment, treadmills, or anything else. If you have lots of stuff on the floor, you can take that as evidence that you tend to buy a lot of things you don’t really need, and the larger piles will identify your biggest problem areas. Now, take some photos of those piles, and put them in places where you’ll see them when you’re getting ready to go shopping (don’t forget to put one on your computer if you shop online a lot). Put one in your wallet, next to your debit or credit cards. Use these photos as reminders of how much you already have. Then ask yourself, do I really need to add to this pile?


Obviously, these are just two of the many problems people face when it comes to making good choices about using their money. When you have discretionary income in today's society, it's as if you're a kid in a giant, diverse candy shop. But the best solution to all of your money difficulties is to be clear about your own values and priorities. Learn to recognize how vulnerable you (and others) are to having your feelings, needs, and insecurities manipulated by advertisers and merchandisers. And to make sure you can deal with these feelings and needs without "having" or buying things. For some more ideas about this, read about The Benefits and Virtues of Voluntary Simplicity.

Click here to to redeem your SparkPoints
  You will earn 5 SparkPoints
Page 1 of 1  
Got a story idea? Give us a shout!
28SHARES

Member Comments

  • Great Article. Will read it through a couple more times. I am on a fixed income and have to budget all my income.
  • Great article and also the one on Voluntary Simplicity with a link at the end of this article.

    Last year my brother and I and our families changed homes for 3 weeks. I was amazed at the simplicity of their lives. They have what they NEED and not an overabundance of things. Since then we have been paring back what we have. Good Will likes to see us coming. I'm glad that others can use what we don't. There isn't so many things for us to take care of now.
  • Good article, but many of us were raised this way and have maintained frugal spending habits all of our lives. Many families are facing financial trouble right now because of unemployment and underemployment caused be collusion between corrupt bankers and politicians. The cost of everything continues to rise yet wages do not. It is often not a case of foregoing a $400 handbag, but more like choosing between gas for the car or paying the electric bill. At some point the ends no longer meet.
  • When I see how old some of the comments on this article are, I'm so surprised I never read it before. It's a wonderful article, and even though I consider myself pretty responsible financially, I really enjoyed reading it. Thank you!
  • Thanx for that great article, I definetely can find myself in the article. Especially buying clothing that is on sale, while I'm reluctant to spend a few bucks to replace my broken shoes, because "I can't afford it" ;)

    Two steps that actually helped me:
    -leave the credit card at home, so that I'll be forced to put things on hold if they are expensive

    -keeping a housekeeping book: And yes, I write down every single item I buy.It actually made me see how much I spent on clothes and eating-out. Shock at first but now it helps me to re-think BEFORE I buy things.
  • AZURE-SKY
    Interesting article, and sadly, most of it is simply common sense. We have become a culture of instant gratification and brand-name idolatry. It boggles my mind to see someone making little more than minimum wage sporting an $800 handbag or designer shoes. Very few people are willing to save up for something because it's too easy to reach for the credit card and worry about paying for it later on. Unfortunately, they don't realize how much extra they are paying for that item due to the compounding interest on the credit card balances.

    My husband and I retired debt free 7 years ago, and built a brand new home that we paid cash for. We have 2 cars, one is 4 years old, one is 2 years old - both paid for. We have money in savings & IRAs. We travel when we want, and live on 2 pensions from work & his Social Security, which total about 25% of our previous combined salaries. We use credit cards, but pay off the balance every month.

    We buy only when things are on sale, and we buy quality items, but we make sure we're really paying for the quality and not the brand name. We actually have a competition to see who can find the lowest prices for big-ticket items.

    A friend of mine has the theory that if he can afford the down payment, he can afford the item. He has a big house with almost no furniture, a fancy car, and lives paycheck to paycheck, praying he won't be laid off from his job. I have several retired neighbors who have huge mortgages, new sportscars - along with the big car payments, and spend money like there's no tomorrow. I just don't get it, because I know they can only afford the minimum payments on their credit cards.

    Sadly, schools don't teach financial responsibility and budgeting, and many people don't learn either from their parents, who are also struggling.

  • Good article for overspenders. But not for us, who already pinch our pennies hard. A trip through the drive through is less than $9 for our family of 5... $.99 menu or $1.99 happy meal day, split fries, and get water (our toddler doesn't eat much yet). But we try not to do it often because you definitely do pay a price with your health that's not worth it. There are discounted organics available from Publix and Walmart that do fit into the budget, though. Organic salad greens and carrots are suprisingly affordable and widely available (even at Publix now that Greenwise has them). Other produce is sometimes on special. And we don't worry about conventional produce like bananas and watermelon, because the peel/rind do afford some protection against pesticices.
  • Wow! Lots to think about!
  • thank you for posting this article. i struggle with budgets and this was helpful. i don't have a lot of it to work with as is, but hopefully this will help me learn to make better decisions.
  • PIRATEPIP
    I read this article thinking it would be the same old same old, but that first advice-apples to apples, made me stop-THATS SO ME!

    Will keep reading this over and over!
  • Man... if it were up to me, all the produce we buy in this household would be locally grown and organic (or just locally grown if I couldn't get organic). I get told that's too expensive. By the guy who thinks nothing of dropping $80 on a fancy sushi dinner. I can think of lots of other people who balk at organics but who drop the difference in amount on a dinner at McDonald's. Then we wonder why both the environment and our health are messed up. It's kind of sad.
  • This has been a lifetime problem for me. What a wake up call! Thank you for this important lesson!
  • GREAT ARTICLE... I CAN SEE ME READING THIS OVER AND OVER AGAIN !!!
  • I can so relate to this article. Thank you for taking the time to write it out. Sometimes it just helps so much to know that someone understands what you are going through and practical solutions that work. Our main problem is the splurging on fast food but that has slowed down a bit, I think with our necessary expenses increasing we have had to make the adjustment. I just want to make it permanent. Now I personally battle with getting stuff I want but don't really need at the store while shopping. I have had to learn to go in with a list and no matter what it is, no matter how much I want it, if I don't have it on the list or need it immediately, I just write it down on the back of the list for another time and keep on walking. Talk about will power! But it works.

About The Author

Dean Anderson Dean Anderson
Dean Anderson has master's degrees in human services (behavioral psychology/stress management) and liberal studies. His interest in healthy living began at the age of 50 when he confronted his own morbid obesity and health issues. He joined SparkPeople and lost 150 pounds and regained his health. Dean has earned a personal training certification from ACE and received training as a lifestyle and weight management consultant. See all of Dean's articles.

x Lose 10 Pounds by June 9! Sign up with Email Sign up with Facebook
By clicking one of the above buttons, you're indicating that you have read and agree to SparkPeople's Terms & Conditions and Privacy Policy and that you're at least 18 years of age.