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.
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: