American Psychological Association. (2012, February 1). Willpower, finances, and spending. https://www.apa.org/topics/personality/willpower-finances
It’s probably not a surprise to read that money and the economy are top causes of stress for Americans, as shown in APA’s most recent Stress in America Survey. Whether it’s thinking about paying the mortgage, buying groceries, or saving money, a lot of brain power is devoted to making financial decisions. These financial decisions, big or small, require willpower.
One way to understand willpower is that it is like a muscle that can become tired. As you exert your willpower, it begins to lose its strength. Recent research indicates that people whose willpower is run down are more likely to spend an increased amount of money and purchase additional items than those who haven’t recently exerted their willpower. Low willpower, research suggests, can lead to less control over spending.
People who are constantly faced with tough financial decisions, such as those who are less financially stable, more readily deplete their willpower. One study suggested that shoppers with less money, who often use more willpower than richer shoppers because they face more frequent and difficult spending decisions, are less likely to resist consuming food and drink while shopping. Therefore, it appears that having to devote willpower to difficult spending decisions can deplete willpower in other areas.
Research shows that certain strategies can help build up self-control around spending and saving money:
Make one financial decision at a time. When people are faced with multiple, back-to-back decisions that test willpower, research suggests that willpower can easily be depleted. Space out your financial decisions instead of making too many at once and overwhelming yourself.
Track your spending. Research shows that tracking can be an effective tool. Keep a daily list of how you spend your money.
Save automatically. Set up bank or investment accounts that draw funds automatically from your pay check. This will prevent you from devoting limited willpower resources to deciding whether to spend or save money. Look for accounts that require you to wait a certain amount of time or reach a certain target before you can withdraw the funds, which recent research indicates are effective in helping people save greater amounts.
Avoid temptation. Staying away from shopping malls and stores can help you manage spending. Choose an alternative social activity over shopping. Avoid opportunities for impulsive spending by leaving credit and debit cards at home and only carry the amount of cash you can afford to spend.
Ask for support. Research shows that having a support system can help you reach your goals. Surround yourself with people you trust who will be supportive of your financial goals and willing to help you succeed.
How a psychologist can help
If you need help building your willpower, consult with a psychologist or other licensed mental health professional. He or she can help you identify problem areas and then develop an action plan for changing them.
Practicing psychologists use a variety of evidence-based treatments—most commonly psychotherapy—to help people improve their lives. Psychologists, who have doctoral degrees, receive one of the highest levels of education of any health care professional. On average, they spend seven years in education and training following their undergraduate degrees; moreover, psychologists are required to take continuing education to maintain their professional standing.
Thanks to psychologists Lynn Bufka, PhD, and Mary Gresham, PhD, who assisted with this article.
Overspending can happen for different reasons, such as: You might spend to make yourself feel better. Some people describe this as feeling like a temporary high. If you experience symptoms like mania or hypomania, you might spend more money or make impulsive financial decisions.
This is known as the “psychology of spending.” Spending money, as opposed to saving, provides an instant feeling of gratification and control. We may spend to fill perceived voids in our lives, to please others, feel “better than” others, or a whole host of other emotionally-driven reasons.
"Overspending is often more than just a lapse in financial judgment; it frequently signals underlying emotional or psychological triggers. For instance, some people may overspend as a form of escapism, temporarily distracting themselves from stress or emotional pain," Hathai says.
The 50/30/20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do. The remaining half should be split between savings and debt repayment (20%) and everything else that you might want (30%).
Money dysmorphia, also referred to as financial dysmorphia or wealth dysmorphia, is a psychological condition characterized by a distorted perception of one's financial situation.
For some, overspending becomes buying-shopping disorder, or compulsive shopping disorder (CSD), which is characterized by repetitive, uncontrollable spending that causes serious life difficulties.
One sign of financial trauma is compulsive or impulsive spending. Individuals experiencing financial trauma may engage in excessive shopping or spending habits as a means to alleviate their emotional distress or seek temporary relief from their financial worries.
People who engage in compulsive spending tend to use it as a coping mechanism. When faced with uncomfortable feelings like anxiety and depression they will feel the need to go shopping. In this case, spending money provides a brief reprieve from negative emotions.
Where do our spending habits come from? It varies, but we are largely influenced by what's around us. This includes: Observing and following the spending habits of our parents or other significant people around us.
When people are reluctant to spend, anxiety or a history of financial trauma may be at the core of the issue. If someone struggles with anxious thought patterns, they may spend a lot of time preparing for the worst thing they can imagine.
Answer. The word closest in meaning to what you want is spendthrift. Spendthrift is a noun that means "a person who spends money in a careless or wasteful way."
Compulsive spending - which is also known as oniomania, shopping addiction and pathological buying - is when a person feels an uncontrollable need to shop and spend, either for themselves or others.
Because that's what a no-spend month is—you commit to cutting out those nonessentials for one month. Just make sure you know your parameters from day one (what you will and won't buy). And do yourself a favor: Get an accountability partner or have a friend take the challenge with you.
We tend to allocate money mentally into different spending categories – whether it's good food, entertainment or a hobby. Identifying how each purchase will bring you satisfaction and joy might help you feel more at ease when you're spending money.
Introduction: My name is Chrissy Homenick, I am a tender, funny, determined, tender, glorious, fancy, enthusiastic person who loves writing and wants to share my knowledge and understanding with you.
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