Keep Track of Your Money

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The internal pressures that make it hard to resist spending

As nice as it would be to place the whole blame on the evil marketing industry, we, the consumers, are hardly blameless. The fact is we want to buy. Many of us have unwritten shopping lists that would make Santa roll his eyes.

  • We want more.
    The fundamental challenge for most of us is that we want more than we can afford. One of the reasons is that our culture has blurred the line between wants and needs. Part of this has occurred because we no longer keep up with the Joneses, but rather aim to keep up with a composite person who doesn't exist. The composite picture may include the dress standards of your boss, the gardening and maintenance expenses of your neighbors, the social life of a new romantic interest, and the car of your best friend. It may also include fictional benchmarks, such as the great apartment that the characters on the TV show Friends live in even though they seem to barely ever work. The result is that most of us have an infinite shopping list in our heads. When we manage to afford the things on the top of the list, we find that there are more wants just underneath.
  • We want what they have.
    Another way that we try to fit in is by following trends. We have all fallen prey to it at one time or another: buying something, upgrading something, just because almost everyone we know is doing the same thing. Is it wrong to want to keep up? Not at all. Wanting to fit in is a normal human desire. Plus, luxury cars are more comfortable than regular ones. Expensive clothes are usually cut better than cheap ones. The problems arise, however, when we consume more than we can afford.
  • We want it now.
    Life is faster than it used to be, and we are used to getting what we want sooner. With easy credit and readily available goods, it is easy to act on our wish list today. For many people, waiting seems unwarranted and planning for the future unnecessary. Stacy, 26, recently changed jobs. She cashed out her small retirement savings account, getting several thousand dollars after tax was deducted. "I cashed out my retirement savings because I have more need for the money now than in the future. My friends say I'm crazy and that if I left it alone, I could have a whole lot in the future, but saving for retirement now seems pessimistic."
  • We are on the consumption escalator.
    Another internal pressure arises as earnings rise. People have more money than ever before so why don't we feel any richer? It's often because Unconscious Spenders have jumped on the consumption escalator: When their salaries increase, their lifestyles become more expensive. If you have seen your pay rise over the years, you probably are having just as much (or as little) trouble living within your means at your current earnings as you did when you earned half as much. Escalating your standard of living is fine when it is a conscious choice. Unconsciously escalating your standard of living can cost you the ability to choose the life you really want.
  • Shopping is not just about shopping.
    As if all this temptation were not enough, shopping has moved from the realm of fulfilling basic needs to entertainment. I bet I'm not the only woman who has used "retail therapy" to get over a broken heart or gone shopping to avoid studying for exams. Shopping malls have become places that are as much about socializing and entertainment as they are about shopping for many people, from the elders who use malls as indoor walking tracks, to the teens who are not old enough to hang out elsewhere. One high-end gourmet grocery chain near where I live even has singles nights, where the store stays open late and has samplings of food and various displays to break the ice among the single people who would otherwise just gaze longingly at each other over the broccolini.
  • Money simply evaporates.
    Evaporation of money is another internal pressure. Most of us don't like the tedious work of tracking where our money goes, and it seems to evaporate. Hundreds of insignificant purchases add up to a significant amount. For some people, having cash on hand means that it simply gets spent on little things. Others find that credit cards result in the same evaporation, with a surprisingly large bill coming at the end of the month, summing up numerous small purchases that have faded into the background by the time the bill arrives. Conscious Spending is an antidote to evaporation because it focuses on what you want and is more motivating than nickel-and-diming yourself.

Continued on page 3:  Exercise: Getting out of your own way

 

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