Are you an emotional spender?

Over the next couple of months, we’re going to focus on figuring out how to have more money to party, travel and shop whenever you like!

Ok…realistically, it may be less than you would like, and sometimes may be nothing at all but I hope I at least got your attention.

The real point of Practical Money Management Tips is to help you figure out what simple things you can do to help you better enjoy your life and not worry about money no matter how much (or little) you make.

The experts are always telling people to budget, save, diversify, maximise, and a lot of other financially-type’ terms. However, because most people usually make emotional spending decisions, until you understand how & why you spend, you’ll never be able to manage your money.

I, for example, LOVE dining out whether it’s by myself or with friends, that’s my thing’. I used to lie to myself about why I dined out all the time, but the truth is I dine out because I hate going home to an empty house. But I realised, when I dined out, I enjoyed myself, met new people (primarily bartenders & hostesses) but enjoyed myself a lot more than when I went immediately home after work.

Understanding this about myself allowed me to allocate a realistic amount to my budget for Dining Out. The compromise (yes, compromise we’re not wealthy or we wouldn’t be having this conversation) to that is that I had to also assess the things that didn’t matter as much to me (eg., makeup, clothes, jewelry), and make a decision on how much less I would spend on these items in order to truly enjoy the thing that matters to me.

Making this realisation also helped me to realise that I can enjoy my money in a way that really matters to me versus creating a budget based on what an expert’ says I should spend my money on. [I can guarantee no experts would agree with my budget for Dining Out – trust me on this one, I’ve checked].

But the most important thing is that I’m happy & enjoying myself when I dine out because I’ve budgeted for it. I don’t feel guilty when I spend it & I’m not secretly worrying that I’m not going to be able to pay other bills.

TAKE ACTION:
Until you know why you spend the way you do, you’ll never be able to create a realistic budget for yourself. So, let’s take the first step…

Over the next month, try to write down:

1) What you purchased [Yes, everything. Things like snacks, utilities, the Sunday paper]

2) How you paid for it [Options: Cash, Credit, Debit]

3) Why you purchased that item [Yes, each item. Newspaper: I like doing the crossword puzzle & telling people about it so they’ll think I’m smart]

You can keep this in a spreadsheet, notebook, word document or on the back of a gum wrapper whatever works best for you just make sure you do it!

This info is going to be the foundation for everything we’re going to work on in the next few weeks. I promise you that at the end, you’re going to be much more knowledgeable about money management (or at least Excel).

http://www.youtube.com/watch?v=DaNNdQVQB9k

8 Responses to “Are you an emotional spender?”

  1. Welcome to PH Kim!! Loved your first post. Look forward to picking up some tips. Money management has never been my strong point. I had to learn the hard way! It’s great to hear the ‘keep it real’ guide to making money work for you.

    • I’m glad you liked the first post! Learning the hard way isn’t necessarily bad…you just want to make sure you don’t keep learning the hard way 🙂

      Enjoy the posts!!

  2. Interesting……looking forward to more posts! Congrats on joining the bloggersphere!

    • Thanks Kes (been a long time coming)!

      Keep checking back…and read some of the other bloggers’ posts as well – they’re pretty cool!

  3. Welcome Kim – it’s such a pleasure and a blessing to have you on board. I know from past experiences I am what you called an ‘Emotional Spender’; to be honest I am still guilty of it to a certain degree now. I definitely used to purchase clothing to help shift my mood to a happier place, however, that feeling of joy only lasted a few moments!

    Thanks again,
    Kehinde 🙂

    • Thanks for the warm welcome Kehinde!
      …and it’s not about guilt…it’s about self acceptance/awareness…spend your hardearned money on things that will give you more than a fleeting moment of happiness 🙂

      (those are my encouraging words of the day)

  4. I love the title of your section ‘Women’s Wealth Wednesday’.
    Emotional spending, interesting subject! I would have to ask the question what value do you put on money? And what is your money mindset? This is a subconscious problem rather than a emotional problem as i.e. what is the root cause and how do you change it?
    I look forward to seeing your other posts!
    Lavinia
    An Infinitely Wealthy Woman – check out my website!

  5. Lavinia – thanks for your feedback!

    Your question is an interesting one…the value I put on money? …good question.

    I asked myself 2 questions about 15 years ago: 1) what did I want my legacy to be when I left this earth & 2) if I live to be 90 years old, what memories did I want to have. So I use my money to spend time with and/or help friends/family and creating amazing life experiences.

    I know I can’t take the money, or the things it can secure, with me when I die. So I save a bit for later – if I’m blessed enough to have a long life, but I enjoy spending it now – in case there’s not a later opportunity to do so…

    I’ll definitely check out your site!

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