Learn how to overcome the issues that drive you to spend way too much.
On that sunny afternoon, as my husband and I took a fitness walk along a row of car dealerships, I never dreamed that we would be cruising home in a brand-new, red, SAAB convertible. The car just seemed to fit the day. After all, this was Southern California, where sunshine and fancy cars abound.
It is also a place where many judge you by what you drive. Of course, we already owned a prestigious foreign convertible, but it had become a real headache with its never-ending, expensive repair bills.
As we negotiated with the SAAB salesman to purchase the car, we abandoned the idea of a trade-in because of the tremendous loss we would have had to take on the market value. Besides, we had driven my husband's car that day, and the problem car was at home. We would just have to sell it on our own.
After several hours of waiting while the salesman repeatedly checked "with the manager in the back," we drove off into the sunset basking in the exhilaration of having purchased a new toy. It took only a few days for us to face the sobering reality that we now had three cars to insure and maintain. Plus, the monthly note was so huge that it rivaled the note on a rental property investment!
It took us much longer to sell the headache car than we had anticipated. We finally admitted that we had made an emotional purchase. We had bought the SAAB out of frustration with the old car plus a desire to maintain a certain image.
I take no pleasure in sharing this story. In fact, I experienced a great deal of guilt over the transaction because I am a certified public accountant and assumed by most people to be frugal with my funds.
My husband is also an astute financial manager. Even though we have never made a purchase that we could not afford, emotional transactions simply do not reflect good stewardship of the money God entrusts to us.
After a year, we sold the car and invested in a single-family home, which ultimately yielded a handsome return. God graciously redeemed our mistake. Unfortunately, the SAAB was not the last of our emotional spending.
Emotional triggers. The problem with an emotional purchase is that it doesn't eliminate the emotion that motivated it, nor will it bring any lasting satisfaction. Isaiah the prophet asked, "Why spend money on what is not bread, and your labor on what does not satisfy?" (Is. 55:2, NIV).
Spending to pacify an emotion is like being given an anesthesia but never getting the required surgery; you get temporary relief, but the problem remains.
I did some honest soul-searching about the car acquisition and concluded that many of my purchases emanated from my basic personality temperament. As a hard-driving, goal-oriented person, I found that my acquisitions were a way of saying, "I've made it."
I wanted to be recognized as a success without having to say a word. After all, I abhorred braggarts, egotists and others who openly exhibited pride because of their possessions.
Having counseled singles, seniors and soul mates—and having observed their spending habits—I have concluded that everyone must come to grips with his emotional views of finances before he attempts to master the mechanics of money management. I can lecture until I'm blue in the face about the importance of having an emergency cash reserve or contributing the maximum amount to the company's matching retirement plan or getting out of debt.
But despite my admonitions, a single overriding emotion can cause anybody to abandon sound financial judgment. Here are seven emotions that may cause you to spend in an unwise manner and some ways to deal with them.
Stress. "You deserve a break today," declares the popular McDonald's fast-food slogan. If you are constantly confronted with stressful situations, you do need to find relief—but not through spending.
My husband and I purchased a 32-foot cruiser boat with the hope of finding relief from our stressful schedules. The boat show was held at the marina, so we experienced on the spot what it would be like to chill out on our own boat. Just the thought of leisurely weekends cruising around Southern California's harbors was enough to seal the deal.
It wasn't long before the boat itself became a source of stress. Whoever said, "The two happiest days in a boat owner's life are the day he purchases it and the day he sells it" was right!
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