My neighbor Tom has a generous spirit… and a pretty large collection of material possessions too. From the largest house on the street to a big truck, an array of outdoor furniture that practically overflows his backyard, and three garages packed with odds and ends, Tom seems to have it all. He’s the go-to guy for neighborhood parties, always ready to fire up the grill and break out his extensive spread of food and drinks. He’s the source of travel tips and always the first person to lend a helping hand when someone is in need.
While my spouse and I appreciate his geniality and generous nature, we can’t help but question the implications of his lifestyle. How much strain does this put on them, both financially and emotionally? Tom and his wife are seemingly successful, but the speed at which they amass and then distribute their possessions can make anyone anxious.
You see, Tom spent his childhood anchored in poverty in Alabama. He would visualize his mother struggling to prepare dinner for him and his four siblings every evening. He started to work as soon as he was old enough, deploying his earnings towards family sustenance.
Joining the Army at 18 was a turning point for him. From then on, a combination of his service pension, a second job, and increased income after marriage has boosted his earnings steadily. His life story serves as a stark reminder of how our childhood experiences shape our spending habits later in life.
Apparently, studies, including one published in the Journal of Psychological Science, reveal that individuals who grow up in lower socioeconomic environments show a higher tendency towards impulsiveness and risk-taking, compared to those raised in higher socioeconomic environments. I can vouch for this as I’ve been in Tom’s shoes. The temptation to succumb to an irrational need to spend can be all too powerful.
Childhood memories of my mother splurging on unaffordable meals only to return home to a dark house due to unpaid electricity bills are still vivid. That sense of urgency to spend whenever we have the means is something people like me or my neighbor, who’ve experienced scarcity, can relate to.
Not everyone born into want reacts this way upon becoming affluent. Some switch to the other extreme, clinging to wealth as if compensating for the hardships of their deprived past. But for us, the rest, the perceived security of new-found material comfort can swiftly turn precarious if we keep surrendering to the lure of spending.
An alarming number of individuals today are growing up in households living from paycheck to paycheck. However, the danger lies in the ease with which we get drawn into the web of consumerism, leading to financial ruin and crushing debt.
The initial step towards taking control is to spot any financially unsound behaviors on our part. It’s completely normal to have desires, regardless of your background. Yet, it appears that individuals who have a more financially stable upbringing are generally more adept at curbing their spending habits than those who’ve been less fortunate.
By setting a goal for your expenditure, you ensure that your money is being spent wisely. Say, you’ve been yearning to take a vacation but have been finding it difficult to put aside the necessary funds. Establish a monetary target and document it. Every time you’re faced with a spending choice, take a moment to consider whether it’s worth delaying your vacation plan.
Furthermore, devise strategies to realize your aim while saving money – this could involve securing flight deals, applying economical vacationing tips, utilizing a credit card that offers maximum air miles, or considering a vacation home rental.
Going easy on your credit card usage is easier said than done, particularly for people prone to spending. Rather than treating your credit cards as an emergency fund or a means for indulgent purchases, consider them money-making tools. Limit your credit card usage and choose cards offering the best travel rewards or cash back. Ensure you settle your credit card balances at the end of every month.
Recognizing and understanding your impulse to spend can help curb such urges. A bit of goal-setting can keep your expenditure on track. Over time, the security promised by childhood dreams of acquisition will be substituted by the real sense of stability offered by a growing savings account.
Not all spenders in the American marketplace are inherently impulsive. Combined American debt stands at over $900 billion. People who’ve grown up poor often feel the necessity to possess more to fit in or are likely to submit to the urge to acquire something fearing they might miss out in the future.
Knowing when you get the impulse to buy and then deliberately stepping back to consider the purchase goes a long way in securing your finances.