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The motivation behind most bad money behaviors is emotional. If we could think our way out of it, that would be wonderful. Unfortunately, we can not – it’s the emotional side of money.
But you can determine how you feel and what’s going on inside of you so you can develop better habits.
Here are five personality types and emotional motivations that cause a disconnect between you and your money decisions and cause you to use money in an unhealthy way. By learning to recognize which personality type and motivations align with your spending patterns, you’ll be able to improve your money decisions and stop allowing the emotional side of money control your spending habits.
The Emotional Side of Money: The Reasons We Spend Too Much Money
Love and Belonging
You’re the person that on the outside projects confidence, while inwardly you long for belonging and love. You might find yourself struggling to create connections with others and develop meaningful relationships. Emotionally you have a hole inside of you that, despite your best efforts, never feels like it’s filled up.
You’re often tempted into buying binges in an attempt to feel connected. Unfortunately, this leaves you ignoring how much you spend or how much you are accumulating in debt and possessions. The internal pressure you feel to belong can cause you to overspend and buy things you later regret.
You mistakenly believe you must do whatever it takes to receive love.
Your personal challenge is learning self-acceptance.
- Tends to attract relationships with people who are needy and demanding or who are never satisfied
- Tends to be easily distracted or disenchanted with people or things
- Hides hurt feelings rather than speaking up
- Fears loss of love
- Tends to want to be admired and feel special
- Often secretly feels hurt that others don’t appreciate you
- Wants everyone to like you
- Spends money to feel connected or loved
- Feels as if there’s a hole inside and buys things to fill the void
- Typically spends money to belong, to please, or to feel the same as others
- Doesn’t feel emotionally connected to money
- Avoids knowing how much you spend or have in debt
- In denial about debt
- Spend money to look good to others
- Doesn’t value saving money
Value and Significance
You’re the ideal spouse, friend or employee because you’re always going out of your way to put the needs of others before your own. Your friends and relatives know you can be counted on for a helping hand or handout because you rarely say no. You’re a softie at heart.
The unfortunate flip side to your endless giving is you often feel resentful, disempowered, taken advantage of, passed over, and in circumstances beyond your control.
Although generous, your attention to the needs of others often leaves you feeling as if you’re a victim of circumstance with little control over your own life. This ends up creating a cycle of helplessness which undermines your confidences and paralyzes you from taking control over your own finances.
You mistakenly believe you need to prove you’re a good person and good enough.
Your personal challenge is to learn boundaries.
- Feeling like an innocent victim
- Tends to give to the point of anger and resentment
- Tendency to feel jealous of others good fortune
- Rescuing others
- Feeling helpless
- Feeling like you have no power, influence or control
- Tends to attract relationships with people who spend more than they make
- Giving away money you don’t have
- taking control over your own finances
- Creating debt as a result of circumstance you see “as beyond your control.”
- Overextending your time and resources to help others
Recognition and Respect
You’re the risk taker. You’re creative, inquisitive and love to explore new opportunities. If something is not the traditional way of doing something, you’re all for it. In fact the more it goes against traditional ways of thinking and doing the more likely you are to feel the pull to pursue it.
While you may or may not overspend, you are the first person to risk investing in opportunities that may – or may not – pay off. You desire to be recognized for being right and to gain the respect of those around you.
Unfortunately, this puts you at risk for losing money and trusting the wrong people. Your desire to always be right often causes you to ignore signals that people you trust may not be acting with integrity.
- Goes against popular opinion by believing you know better
- Always looking for the big win
- You don’t like to admit your wrong
- Trusts others without checking them out
- Often ignores all the warning signs that people or investments you trusted are not working out
- Often gives multiple chances to people who have already proven they are untrustworthy
- Slow to respond to money situations, so a small loss becomes a big one
- Invests in risky opportunities
- Often feels disassociated with money
- Creates debt by investing in people or opportunities that don’t pay off in the long run
- Attracts people who like to rescue or control others
- Avoids thinking about money situations or the consequences of making a risky financial move
You mistakenly believe you need to prove you’re right.
Your personal challenge is to be more realistic in your thinking.
Status and Validation
You are the life of the party. The person others want to be around because you have a gift for living life to the fullest. Extreme is your middle name which drives you to want the best at all times.
Bargain hunting is not even on your radar most often because you’d rather have the newest and best before anyone else does. You’re keeping up with the Joneses and trying to surpass them.
You love to treat your friends and family to dinners out, expensive gifts and although your generosity is appreciated, you’re faced with the consequences of living life large. This often appears as debt and other financial obligations that are difficult to meet.
Because you spend every penny, you learn you often go through cycles with money whereby you either have an abundance, or you’re just scraping by. You have a somewhat youthful disregard for money and are unrealistic about the consequences of spending so lavishly on yourself and others.
- You like to show off
- Is often in the chase for the next best thing
- Frequently wants more and more
- Does everything to the extreme
- Attracts relationships with people who often need a helping hand or a bailout
- Is keenly aware of status items
- Compulsively spends
- Frequently picks up the tab, even when in debt
- Buys lavish items despite current bank balance
- Creates debt due to buying the best of everything
- Lavishes gifts on friends and family
- Buys only the best
You mistakenly believe that whatever you have is never enough.
Your personal challenge is to find balance.
Security and Freedom
You’re an “I’ll do it myself” kind of person due to your desire to be as independent as possible. You crave freedom. You are super frugal and live within your means no matter what your income. You don’t ever want to find yourself in the position of giving up your ability to chose for yourself, owing anything to anyone, or being a burden. You rarely overpay and hunt out a bargain.
But the price you pay for this independence is you secretly fear losing everything. This underlying fear drives you to minimize your needs and lifestyle and has a direct impact on your income as well.
You have a tendency to micromanage your money. You rarely have debt and love to save money.
- Minimal living standards (not minimalism)
- Tend to attract relationships with people who have significant debt or are overspenders
- Do it yourselfer
- Typically only makes purchases if an item is on sale
- Extremely frugal
- Tends to overwork to create greater security
- Over thinks purchases
- Is great at saving but not at investing
- Undercharging or not earning your worth
You mistakenly believe that what you have – money, possessions, people – may be taken away.
Your personal challenge is to learn to trust.
More to Consider
Now if after reading this you’re thinking, “I can see myself in more than one of these descriptions!”, you’d be correct.
Often we have more than one emotional reason we spend too much. It always depends on what the trigger is.
And of course, there are varying degrees of every type I’ve outlined. At the beginning of overspending, the problem at the surface isn’t maybe that bad or that deep. But if ignored and allowed to continue, the debt cycle gets bigger and bigger.
That happened to me. At the beginning of my spending issues, it didn’t appear to be all that unmanageable. I’d rack up maybe $5,000 worth of debt a year only to pay if off when my tax return came in. Eventually, this number grew and grew, and my tax refund could no longer cover the balance owed. From there, the problem exploded until I found myself staring at 50K worth of debt.
So no matter where you are with your debt and spending, whether it be extreme or still somewhat manageable, you can figure out what makes you tick – your emotional side of money and how to fill the void in a healthier way so that you can have a balanced relationship with the almighty dollar.
Today, all you’re going to do is read over the different money types and emotional reasons we spend too much money and see which ones resonate the most for you.
Tomorrow we’ll look at specific ways you can begin to change your relationship with money and find healthier ways to fill your emotional needs that don’t include shopping.