Many people live with the notion that they can save tomorrow, if they can even see tomorrow. Too many people don’t think about their futures, which is why they are more likely to overspend today without planning for things like retirement. Too many people are more worried about spending money than they are about saving money, which is why they find themselves in debt and unable to plan for the future. Much of people’s inability to handle money stems from emotional and psychological factors in addition to easy access to credit, which many consider free money.
Learned Behavior
Many people who are not good with their finances learned their behavior from their parents. Children who grow up in a home with parents who are always worried about money and who spend their money irresponsibly are far more likely end up with emotional and psychological issues regarding money. They may have the mentality that saving is something they can do later after hearing their parents say that they had years before retirement to save. They may live paycheck to paycheck because that’s all they knew growing up. They see today rather than tomorrow, which leaves them unprepared financially.
Emotional Overspending
Depression causes emotional money issues. Overspending often makes people who feel depressed feel better for a moment. This causes them to throw caution to the wind and spend money instead of saving money as a way of coping with their emotions. Too many people see their credit cards and think that they can afford to pay the monthly payment, so why not spend money on items they really want and worry about making the payment later. These people only feel the boost in their mood when they shop; they do not see the damage they are doing to their financial future.
Low self-esteem is another trigger for overspending. People tend to buy things they cannot afford or do not need in an effort to make themselves feel better. By working on their self-esteem they will find that they buy more needs and fewer wants, which will enable them to start saving money and preparing for the future. Those who cannot afford their purchases are overspending in an effort to build their self-esteem. The easy access to apply for new credit cards, offers that come in the mail, and emails sent to people with low self-esteem makes it easy for them to fall into the habit of overspending.
Saving money is essential to building a financially stable future. People with access to too much credit, the inability to see tomorrow, and the thought that they have plenty of time to start saving for retirement are the people who are more likely to overspend. Learning to manage their money, see the future, and understand the overall cost of excessive credit card usage is the best way to get people to learn how to spend wisely and save. It also helps to teach people what the actual cost of retirement really is, and how much they need to save to make retirement possible.
