Spending Mentality

You can earn as much as you want but if your mentality with regards to spending is not correct, even generating 1 million per year won’t stop you running into financial issues.

Societal pressure or trying to “Keep up with Joneses” can push a person into a financial situation that they may never imagined they would be in.

We live in a world where every time you turn on the TV or if you’re on YouTube or Instagram, an advert is shouting BUY at you. “You need this" you might hear. You didn’t five minutes ago but the advert is telling you that’s it’s now a necessity.

You can reach the stage where you don’t even know what the difference is between a want and a need, you may already have reached it...

How do you determine which is which?

Needs v Wants

Food, water, shelter all important for your survival, these are examples of needs. Just because you use the word “need” in a sentence when talking about an item you want to buy, it does not make it an essential item.

“I need a new washing machine”. This may come as shock to some people but there are people all over the world who have never used a washing machine in their life. As this is not essential for your survival, it is a want.

Now we totally get in the real world a washing machine is a pretty important item for everyday living, we are realistic. However, when you start confusing “wants” with “needs” you run the risk of having a spend mentality that can lead you to financial difficulty. Our article Luxury v Necessity –How to spot the difference will help you understand more about this subject. It’s in the purple box below.

Trying to fit in

We mentioned before about societal pressure playing a big factor in people’s spending. One of our team told us this story. He said:

“I remember as a child needing a pair of Nike Air, just so I could fit in with the rest of the kids no matter how much it cost or how long it took to save for. I use the word need deliberately, because at the time it felt like an absolute necessity so I wouldn’t be teased. As an adult I realised that children will always find something to tease you about. At the time, it was just about fitting in with the crowd for me.”

The Real Debt Guy

This type of mentality doesn’t stop at childhood for some people, it follows them into adulthood.

Their spending gets bigger as they try and Keep up with the Joneses. If they don’t have the income to finance it, credit can come into play and that’s when things can go very wrong. Being mentally strong with spending is important. Funnily enough we have an article called Keeping up with the Joneses in the purple box below. You will learn about a term called the Spend Circle.

We're all about prevention

We’re not just about providing you information to help you tackle your debt situation. We want to make sure that you never get back into financial problems again.

It’s not just about putting a plaster over a cut, we want that area healed stronger than it was before, so it never opens again. Which is why we encourage you to always keep on top of your finances. Spending plays a huge part when it comes to people getting into debt. So, make sure you regularly use our free budget planner to stay on track and if you ever feel alone our community is here for you anytime.

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Budget planner.

Do you know how much you have left at the end of each month? Do you need to send an income and expenditure to a creditor? We've got you covered. Our budget planner provides you with a simple and free way to view and track your spending.

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