The Emotion of Money

rakwriter By rakwriter, 24th Jan 2015 | Follow this author | RSS Feed | Short URL http://nut.bz/v6hlpg3i/
Posted in Wikinut>Money>Making Money

Holding on to money can be tough, but it's not all math and dollar signs. Read on to learn how to account for the emotional component of money.

The Problem

If you're a breathing human being, chances are you need money. Most likely, you also have trouble holding onto the money you make. You might budget, plan a place for every penny, and do your best to stick by that budget, but it seems the money has a way of disappearing, right?

The Problematic Solution

Most financial experts talk at length about saving. Guru Dave Ramsey encourages the idea of paying off debts in a specific way in order to save money for later. Others talk about putting a majority of your cash into savings. They haul out percentages, facts and figures, and all their budgeting categories, but they rarely--if ever--mention emotion.

When you've lived for ten years without a budget, suddenly locking yourself in that cage can be downright frightening. We are creatures of habit, accustomed to our lifestyles. As weird or pathetic as it might sound, going out with our morning latte, our weekly movie, or that pack of cigarettes can send us into a nervous tizzy.

Why is that? Because we're not Vulcans. Not everyone has the ability to cut emotion out of their lives--especially when it comes to the basic tool by which we meet almost all other needs. Without money--even a little bit--in today's world, you can't get very far. It's that knowledge that attaches us to cash. The only thing to which we are more attached is our lifestyle--our comfort zone.

Budgeting on Emotion

Most people don't budget. In an April 2013 Gallup poll, statistics showed that two-thirds of Americans do not have a budget for their money. A Bankrate.com survey in 2013 concluded that 76% of Americans live from paycheck to paycheck, so it's a small wonder that no one budgets. Why would you bother if your money's spent as soon as you get your paycheck?

Budgeting is a powerful tool to remove money woes, but it's not an overnight fix. Most people are savvy to the fact if something sounds too good to be true, it probably is. Budgeting can keep you locked into a lesser lifestyle for a while, and that's not comfortable. Discipline is a basic necessity for budgeting, and many people have less discipline than they'd like to think.

The biggest mistake I have seen in budgeting is in letting worries over debt bog things down. When you're used to a latte every morning or that weekly trip to the pub, suddenly jamming all your entertainment money into paying off debt is unwise. There are people who can grin and bear the loss, but most people don't have that kind of self-control.

The Real Solution

Most people have debts they would like to pay off. I was in that boat, with debts ranging from a few bucks at the library to thousands of dollars for an apartment complex I lived in for two years. After taking a note from financial guru Dave Ramsey, I started with the smallest debt first.

It doesn't feel that great to pay off a library fine when there's thousands of dollars owed for legal fines (darn my heavy left foot), medical bills (antibiotics are expensive buggers), and that daunting apartment complex (the carpet only caught on fire a little bit). However, I did notice that I had more money to throw at other debts as the smaller ones got paid off, and that felt good.

At the advice of a good friend and mentor, I also figured out what my usual entertainment expenses looked like. Four coffees a week, the occasional cigar, and some other expenditures stacked up. So, take out one of the coffees, skip the cigars, and clip off one bit of entertainment a week. Taper down every week after that, and eventually you can entertain yourself for twenty dollars (the equivalent of 13.33 British pounds) a month.

The emotional impact is significant, even in a few weeks. What seems daunting at first becomes easier, because positive emotion replaces worry and frustration. Meanwhile, the self-discipline slowly builds, leading to a skill that can be seen in other aspects of life. By creating a budget and allowing yourself a bit of walking around cash, saving money gets easier.

Does that mean budgeting is going to suddenly be comfortable? No. Any lifestyle change disrupts our comfort zone. What matters is that you work within the parameters of what you can handle. Like a weightlifter, you'll find that what really bothers you at first will soon be a cinch, and you'll be lifting more weight in no time, on your way to financial freedom.

Tags

Debt, Depression, Emotions, Financial Independence, Freedom, Greed, Happiness, Money, Spending

Meet the author

author avatar rakwriter
Rob is an aspiring author living in Colorado Springs. When he's not writing about finances, social issues, or zombie culture, he spends his time working on his debut novel.

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Comments

author avatar Sivaramakrishnan A
26th Jan 2015 (#)

Most people anywhere cannot budget as their income serves only to cover their basic expenses plus repaying loans for housing. Any extra is easily spent away on those that are almost basic too! siva

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author avatar rakwriter
26th Jan 2015 (#)

That is true in some cases, but there are usually ways people are spending their money foolishly that they are overlooking. Wasted food (and unhealthy food) is a big one. I'll be writing a future article about expenses people can cut or change to save money.

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