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July 18, 2007
Remove Emotion from Money
How you feel about money will impact your credit score. To get a grip on your finances you must learn why you spend on credit. Emotions are the driving force behind most spending. Let’s explore why you might be over-spending and come up with ideas to stop spending frivolously.
Since first entering the business of providing people like you with sound financial advice I have seen many people return their credit standing from very bad to excellent.
The problem most people have that leads them down the bumpy road of bad credit is their emotions rule their spending habits.
Case in point, my friend Susan recently had a relationship breakup and she was feeling down, depressed and lonely. With emotions bubbling over logic was certainly not prevailing.
Susan needed a mechanism to cope with the loss of her long term relationship. Rather than dealing with the emotions and coming up with ways to move on in her life Susan started feeling a sense of “I deserve everything life has to offer”. Off she went to the mall armed with her credit card. Susan bought the most expensive designer shoes, clothing and accessories she could find.
Wow! Did she feel great!
Yeah, she felt great for all of 2 weeks when the credit card bill arrived. Susan was faced with credit card debt of $2500. Susan is now more depressed than ever not only has her relationship broken down now her finances are a disaster.
Sure she has some great looking clothes but she can’t go out due to the credit card debt she amassed in such short order.
Emotional spending is typically what puts most people in bad financial situation.
The fact is life sometimes throws bad circumstances our way and when these down times come it is crucial that we recognize that there are emotions of hurt, pain and suffering going on and to combat those negative feelings our minds start to drift towards a sense of entitlement and deserving. It’s during those moments that we throw caution to the wind and spend like a hurricane.
Next time you are in a place of despair and grief recognize the emotions for what they are and most importantly put that credit card away. Over spending will only lead to longer term pain.
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