This is the 4th post in the Debt Repayment Plan Series! If you’re new to this series, start here.
Throughout life, we make many, many choices. Many of those choices are financial, whether we realize it or not. And I’ve made some pretty odd financial choices, according to society. For example:
- I kept the fixed repayment option for my student loans because it would cost me the least amount overall.
- I only spent 3 years getting my Bachelor’s, because
- I could, and
- It was cheaper that way.
- I bought The Complete Idiot’s Guide to Personal Finance in Your 20s and 30s when I was 17 because I knew I wanted to have control of my finances.
That’s just the beginning. I’m a giant weirdo when it comes to money and debt. And you know what? I’m proud. I’m not comfortable having debt and I want it gone, as soon as possible.
Let’s look at some examples of choices you can make that are also financial choices.
Everyday Financial Choices
- Buying coffee everyday
- Buying breakfast or lunch everyday
- Using credit cards
- Phone plans
- Retirement savings
- Where you bank
- Shopping habits
- Your car
- Your home
- Having children
While that’s nowhere near a comprehensive list, I think you get where I’m going with this. Basically, around 60-70% of the choices you make on a daily basis are financial choices. The bigger choices are pretty obvious (car, house). But the day-to-day choices add up!
Buying just a regular coffee at Starbucks every day on the way to work will cost you over $660 a year.
Take a minute to think about what kind financial choices you made this week.
Where did you spend your money?
What did you get?
What mood were you in when you bought it?
Did you need it?
Did you really need it?
Emotions play a significant role in every decision you make. Have you ever decided to reward yourself for doing something you didn’t want to do? Or to cope with a crappy day? I know I have. So how do you fix emotional spending?
You need acknowledge that it has happened. If you are aware of your behavior, you can change it. If you pretend it doesn’t exist, you won’t be able to change anything. There are several different emotions or issues that can lead to emotional spending: jealousy/comparison, sadness, loneliness, boredom, not knowing how to deal with something, and more.
After you come to terms with reality, if you really want to change your behavior, you need to hold yourself accountable. Or better yet, get a close friend or family member to also hold you accountable.
Now to change your behaviors, you need to make some changes (didn’t see that coming, did you?). Regardless of what you do when you want to make emotional purchases, you’ll need to come up with a replacement behavior. It depends on exactly how your emotional spending occurs, but mostly likely you’ll need to do one or more of following:
- Start a new hobby
- Take a different route to or from work
- Get an Accountabil-A-Buddy (accountability partner)
- Unsubscribe to deal emails
- Unsubscribe to tempting site emails
- Create a 10, 30, or 90-day waitlist for purchases
- Download an AdBlocker
- Cut up your credit cards
Remember: People don’t quit successfully without a replacement. Make sure you have a replacement behavior lined up or you’re more likely to relapse.
Find ways to limit your temptations. Decide not to buy something right away. Get the support from your family and friends. Do what you need to do to succeed.
What financial choices do you make every day?