Morgan
If you are not a wheeler-dealer business type and your cellular phone bill nears the $10,000 mark on a monthly basis, you may have an addiction. If spending thousands of dollars on phone credit while gossiping is sweeter to you than seeing your investment accounts grow, then you are in emotional trouble.
Dr Kai Morgan, clinical psychologist at the University Hospital of the West Indies, notes that emotions definitely play a part in the way people spend their money.
"Additional spending may occur when someone is feeling low or when someone feels celebratory. People spend to cheer themselves up."
And, Dave Dixon, Ocho Rios branch manager of Scotia DBG, says emotional traps also await those who are investing.
"From an investment point of view, the two main emotions that one usually contends with are fear and greed," Dixon says.
He notes that there are some individuals who are very analytical, who like to examine all the details of a transaction and even get a second opinion before writing that cheque or swiping that credit card.
Yet, there are others who are easily swayed by promises of high returns, even without being supplied with the mechanism by which such returns would be delivered. The end result is usually disaster.
According to Dr Morgan, while nothing is wrong with spending impulsively from time to time, when trigger-happy spending becomes a habit, or when it is done to the detriment of that person's normal way of functioning, then it is problematic.
Some other triggers for irrational spending include unhappiness, guilt, perceived family obligations, infatuation, laziness and an irrational love of convenience.
In some cases, the expenditure is justified in terms of need, but then verges on the irrational when measured against what one's priorities should be.
Spending $1,000 for taxi fare to go home because one hates taking the bus may be justified at the end of a hard day, but is patently a questionable action when the $1,000 was money intended to buy meat for the family table for the week.
Your savings balance will ultimately suffer as, in such a case, money is borrowed to replace the 'impulse' buy, taking away from funds which could have been saved towards another much-needed long- or medium-term goal.
A weakness for bad investments
What can you do if you have a weakness for bad investments? Dave Dixon advises that you analyse all the details of that investment before you get in.
For other expenditures, ask yourself, do I really need this item?
Learn to say no to yourself, friends and relatives.
Before you make the final decision on any purchase, ask yourself 'Can I afford this item and do I have to finance this?'
Plan your purchases and make a list based on your priorities.
Take some time and think it through.
Be patient and compare prices before making that purchase.
If you find yourself withdrawing money from the ABM every day to take love interests to hotels in Port Henderson, Portmore, you may need help.
therapeutic solution NEEDED
Alternatively, if your day ends at your favourite watering hole, from which you depart at closing time with so little cash you have to ask your spouse for fare or gas money the next day, it is time to ask a counsellor for a therapeutic solution.
Writer Lynne Thompson, whose views can be found at www.focusonthefamily.com, adds that triggers for overspending might include the death of a loved one or stress on the job.
"Self-destructive behaviour is largely brought on by feelings of inadequacy or loss. When we feel like we have less, we are spurred on to gain a sense of having more," she writes.
This can often lead people who do not have much money to acquire tons of junk, just so they can feel like they have 'stuff'.
Another way of avoiding the money traps caused by your emotions is to make a note of all the money you spend on a daily and weekly basis. From this will emerge the patterns that will tell you if you are allowing your emotions to destroy the long-term goals which you hold dear.
A counsellor or financial adviser will help you make sense of the irrational habits you may have developed in spending your money, and help you to chart a new course for the future.
avia.ustanny@gleanerjm.com
BIG-TICKET ITEMS FOR IRRATIONAL SPENDING:
Cellphones. If you must chat to your friends for hours every day, find a plan which allows you to talk for less or for free.
Fast food and rum bars. If these are your weaknesses, find alternative means of finding comfort and company or reduce your visits to match your budget.
Sex and porn. Talk to a psychologist about this addiction. Find healthier ways for getting an emotional high.
Impulse shopping. Ask yourself, how will this buy affect my long-term goals? Is buying this new outfit sabotaging my hope of purchasing a home in three years' time?
The status car. Is this vehicle more car than you need? Do you have a better purpose for the large amounts spent on bank payments, insurance and upkeep - like fattening your retirement account? Could you live with
Convenience shopping. Going to the nearest shopping outlets may mean paying premium prices. Shop around for the best price. Put the money saved in your vacation or dream home account.
- Sunday Business
Contributed