Sometimes spending money just makes you feel good. It’s not the actual action of giving away money, it’s the result of dropping a load of cash on something nice, like a weekend away, or an afternoon at the spa, or a shiny new car. The nicer things you have, the nicer you feel. This is something that I think a lot of us have known for awhile, but until I read this post over at The Simple Dollar, I came to the following realization. One’s self worth has a huge impact on their net worth.
If you are constantly feeling bad about yourself, or a situation, then it would be no surprise if you also felt the need to spend money on small or large things to make you feel better. Here’s a couple steps to identify whether or not you have this problem and what you can do to change it.
Identify the Problem
Trying to figure out if you are facing emotional difficulties can be hard for a lot of us. Tying that together to your finances can be downright impossible. The best thing to do is to ask a close friend that you trust what they think. It often takes an outside eye to determine these things for you. If you don’t have that option, the best thing you can do is grab your financial transactions over the last month. Write them down into two different categories. Split them between necessary and planned expenses that happen every month, like rent and bills, and impulse purchases. It might be a movie you decided to see at the last minute, or a chocolate bar or two that you picked up while grocery shopping. Now, go through each of those impulse purchases one by one and try to remember what you were feeling when you made that purchase. Were you upset because of problems at work? Were you sad because of something your friend said? Or were you just excited by something that you saw? If you determine that the majority of your emotions were negative when you made impulse purchases, it may be that you have a self worth/net worth problem.
While you are at it, total up your impulse purchases over the last month. Perhaps seeing it all added up together will give you a little shock to the system that could help you when you find yourself at the checkout with six boxes of frozen pizzas.
Replace the Good Feeling
One good step to take would be to find something else, other than purchases, that make you feel good. Maybe a nice cup of home brewed coffee just makes you feel cozy and safe, or perhaps you just need a good chat with your best friend. Whatever it is, find something in your life that gives you the same sort of feeling that you get when you purchase something nice for yourself. If you can’t find anything that’s equivalent, try to determine if there is something inexpensive you can purchase that will give you the same emotional boost as a more expensive purchase. Instead of a new pair of shoes, you might just buy a small bag of chips. Personally, when I was in college, I found that going to the library and getting out a stack of books made me feel like there was the possibility of a good future – even if the books didn’t turn out to be as good as expected, just the feeling that there was hope for a good read gave me a quick emotional high.
Cure the Cause
If you have identified the problem and taken some steps to replace the good feeling, please recognize that it is only a stopgap for your finances while you struggle. Ideally, you will work together with someone to get at the root of the problem. Stopping your impulse purchases is a great step to take, but it won’t keep you from having low self esteem. If you can get rid of the reason you are feeling down, like the woman did in the aforementioned article by getting out of an abusive relationship, then you might find that the financial implications will solve themselves.
Have you ever struggled with a low sense of self worth? How did it impact your net worth?
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Alan Schram writes about personal finance and his encounters with it in his everyday life. Alan is recently married and is looking to save money on expenses and reduce his debts.
Way to ask the tough question.
If my personal outlook drops, my spending goes through the roof. I’ve never tied it to self worth before, but looking back the years I was the most unhappy were the ones where I spent the most money. This concept really undercuts the idea that people should stay in jobs that make them unhappy because the money is good.
Interesting topic.
“Replace the Good Feeling”
Mine is turtle necks, coffee, and a good book. There’s nothing like feeling warm and snuggled up while absorbing yourself in a story outside of yourself to let you pop back into place.
Horse training (or just a ride) to help bolster some self-worth and self-confidence isn’t a bad option either.
Great post.
There’s been a lot of talk about the power of the mind/attraction etc. These are not new concepts but any means. Its been practice for generations. However most of us, myself included have forgotten or taken it for granted in the pursuit of other goals.
We need to realign ourselves to our ‘real’ priorities and avoid getting side tracked
Virata Gamany
Spending more than one can actually afford may have something to do with the individual missing something in life, maybe self-esteem and self-respect.
Incredibly insightful post. Spending money does release mood enhancing chemicals in the brain. The problem is that the effect is short-lived and needs to be repeated to get that “high”. It is much like any other addictive behavior which needs to be recognized and treated at the root cause as you have mentioned.
Hi Alan,
That’s a really interesting way of thinking about your spending! I have definitely known people who fit into the category of emotional spending. They have buy to give themselves that little high you get when you’ve bought something new. Then after a few days, the excited feeling of your new purchase wears off and you have to buy something else to get it back!
I think you come of with some good alternatives to shopping to give you a good feeling. Next time my wife wants to buy something for the house, I’m just going to tell her to have a cup of coffee!
Thanks for the read,
Timothy
There must be a correlation to overspending and low self-esteem… But, I’m not sure.
Have had moments of doubt before of course, but I don’t go buy things. I just try and try harder.
Sam
I have a mental list of activities to make me feel happy. For example; take a walk, do yoga, take a bath, clean the house (I know, this one’s a bit crazy), to name a few.
I’m not convinced it has to correlate. Spending due to low esteem? Perhaps its more common than not but I’m sure there are tons of people out there who just enjoy the clothes they wear or a certain type of food. Its a different passion that’s unrelated to self esteem.
I would be first to admit that I live to eat. I wouldn’t mind spending a lot more as long as the food is excellent. Is that due to a low self esteem?
Virata Gamany
There is definitely a connection between low self-esteem, feeling down, and the need to buy and consume. People buy thinking it will “fill up” the empty feelings they have. The problem is, it doesn’t work.
Moreover, sometimes you will see the exact opposite behavior: a person does not feel so great about him/herself and so tries to make a lot of money (ie increase his/her net worth) to compensate. Often, the more conceited and insatiably wealthy the person is, the less worthy that person feels in his/her own eyes.
Well I agree that there’s a correlation but it doesnt mean someone who spends alot is generally suffering from low self-esteem. The reverse may be more useful as a stereotype.
Virata
This is really a very interesting post.
The truth is that we all have been tought from a young age success is what you have in your bank account which connects to the lifestyle you live.
very simply put and on point, thank you for this. This reminds me of myself couple of years ago. Self worth is definitely at the core of this issue and realising it is the best personal breakthrough i have ever had.
cheers