Articles (2007-2008):

Money and Psychology

If you observe your relationship to money, you’ll probably find that it reflects your core beliefs. Whether you believe that you’re useless with money, you don’t deserve to have money or that money’s hard to come by - that’s usually what you’ll experience. It’s also linked to your emotions. A fear of failure, or feelings of insecurity, guilt or anxiety often results in our repeating habits and patterns which eventually get in our way – and, unsurprisingly, we often find money slipping through our fingers.We inherit money behaviors and attitudes from our families and other influential people in our lives. According to social learning theory, spending behaviors can be viewed as learned behavior that is passed from generation to generation. Some of these behaviors may be influenced by religious teachings or cultural norms.

For people who are overspenders, often, possessions give them identity. Overspending can involve over-use of credit, or the need to spend money to create a mood change.Studies show that most people are much less likely to buy, or less willing to spend as much, when paying with cash as opposed to credit cards.Single, married, separated or divorced whatever your situation, its worthwhile to do some self-searching to understand your attitudes towards money and how they impact your relationships. Money is a far more emotional topic than most people acknowledge.

He goes on to say that our state of mind affects the way we earn, spend and invest. Unless we deal with our unconscious attitudes, we will almost certainly sabotage our success.

If psychological factors influence your spending, credit reduction programs are like using perfume to cover body odor: they will treat only the symptoms, not the root cause.   

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