Do You Feel Entitled To Money?
One of the biggest obstacles for those who are trying to save money and pay off their debt is their notion that they are entitled to money. They look at celebrities or their neighbors and want what they have. They feel like it's not right for them to be left out of that happiness (because, in this consumer driven world, we often equate happiness with our ability to spend, and who isn't entitled to pursue happiness?). (See also: 6 Ways Money Really Can Buy Happiness)
"It's Not Fair"
There's a feeling of "it's not fair" when someone else has more money. Why do they deserve to enjoy those things? So the race is on, for bigger, newer, and shinier things, all charged on credit. If pro-athletes, celebrities, and lotto winners can end up bankrupt because of overspending, what are the chances for us regular non-millionaires?
If you aren't able to accept your current situation (your income), you will never be ready to live in a financially responsible way. Here's a quick self-quiz:
- Do you buy things because someone you know just bought one or talked about getting one?
- Do you buy things because you saw a photo of a celebrity with one?
- Do you justify buying something you can't afford because you feel you deserve it?
- Do you compare the things you have with things other people have, and feel superior if yours is better and inferior if yours is not?
- Do you always pick the latest model or the more expensive one not because of the features but because of the price?
- Do you feel like you're missing out if you don't own something someone else has?
- Do you think it's okay to spend on credit right now because you know you will make more money later?
10 years ago I would have answered yes to at least 4 of these questions. But any yes to these questions means you feel entitled to money, and as long as you feel that way, living within your means is out of your reach, no matter how many coupons you clip or brown bags you bring to work.
Accept What You Have
What can you do to shift this mindset? Accept that you have the money that you have. Accept that there are things you just can't afford. Believe that there are things that you can afford that will satisfy you. Believe that it is more important for you to not be in debt and save money, than it is to have something.
3 Ways to Start
This type of emotional spending (seeing something you really, really want or seeing someone else with a new toy) is what impulse buys are all about. The most effective way to curb impulse spending is to give an opportunity for time to equalize the emotions.
If you really want it, save up for it. You can have anything you want — you just have to save up for it. You don't have to deny yourself anything. The question is, is that thing you want really worth that time and effort? When you actually have to save up for something, it will give you time to contemplate how desirable it really is.
Borrow it. Borrowing does two things. First it allows you to really know how much utility it's going to give you. Second it gives you the same "high" as if you had bought it for yourself because you have something different. How you feel when you return it will give you a good idea of whether it is something that will truly give you value.
Commit to a waiting period. Again, it's all about giving yourself some time to get over the initial "ooh ooh I want that" feeling. Give yourself a 3 month waiting period for any purchase. If in 3 months you still want it, you can buy it (if you can pay cash for it of course!).
Where do you stand? Did you take the quiz? Are there other ways to get over the feeling of entitlement to money?