When I was thirteen years old, my dream was to own a pair of Dittos jeans. Back then, they were a must-have item in my Southern California Junior High School. When my father surprised me with some money to buy clothes for the school year, I happily went to the mall to try on a pair of Dittos. They were everything a young girl wanted.
But I didn’t buy them. Even though I desperately wanted them and could afford them, I could still remember a few years ago when money was tighter, so I decided to be practical. With great sorrow, I put the Dittos back on the shelf and bought three pairs of cheaper jeans.
It’s been a decision I’ve always regretted.
A frugal person would argue I made the right choice—three jeans for the price of one pair of designer jeans is a smart purchase.
I don’t disagree.
It is a smart purchase but wasn’t the right one for me. I made a quick decision based on memories of my mom diligently saving so she could buy me a pair of shorts that I accidentally ripped the next day playing with friends. My mom was incredibly gracious and understanding, but I still knew it had financial ramifications for her. Even though years had gone by and things were better, the memories of silently worrying about money still held so much power over me that I chose being practical over something I loved and could afford.
I let fear rule my emotions and did not slow down to think about what was really important to me. And yes, what was really important to me was a pair of Dittos jeans that I loved over owning three pairs of jeans that I never liked. It may seem shallow to care about a pair designer jeans so much, but I was thirteen and fitting in was important to me. But even more importantly, had I taken the time to slow down and weigh my options, I would have realized one new pair of jeans that I loved was the better and more cost-effective option. Volume is not always the better deal.
My father taught me many things about money, but my biggest take-away was that money is emotional. Anyone can be taught how money works, but true financial freedom comes from understanding what drives your emotional response to spend or not spend your money.
Whether you are currently in debt, a reformed debtor or have never been in debt, you need to understand how your emotions can affect your spending habits.
You might be surprised to see how much purchasing power anger, frustration, fear, heartache and boredom have these days. We use emotions to justify purchases that we believe we’ve “earned”. Other times, we have a reason to celebrate, but old fears resurface so instead of treating ourselves to something we truly want (and can afford), we settle for something less, which gives us little joy and is often a waste of money.
Does any of this sound familiar? In many instances, emotional spending is the root cause of most debt. Thanks to easy access to credit cards, we try to buy happiness, instead of dealing with whatever is affecting us.
Take a look at the list again and see which emotions cause you to spend. These are your triggers. You want to become familiar with them, so the next time you find yourself pulling out your credit card, you can stop and ask yourself what you’re really feeling before you make another emotional purchase.
Financial literacy and emotional competence go hand-in-hand. When you are financially literate, you understand the role emotions play in your financial life and do not allow them to drive your spending habits. You slow down and look at the options within your price range and weigh them against what is most important to you. The best way I know to do this is to align your money decisions with your values and goals, and I will share how I do that in my next post.
And those Dittos jeans? It took a year of working and saving my money, but I finally bought them. While I regret not purchasing them with the money my father gave me, I did learn a valuable lesson. Now when I’m at the store with my girls, we always slow down together and carefully weigh our options to make sure we make the best choice possible.
What was something you regretted buying or not buying? What are some of your emotional triggers?
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Photos courtesy of www.freedigitalphotos.net.
SHANNON RYAN, CFP®
About six years ago, before netflix and all of those cable alternatives, I thought that cable was too expensive. I bought DVD sets of two shows that I loved, watched them once, and that was it. In the end it was more expensive than cable and I don't have any use for them now.
I can relate to your story because it was embedded in my brain to not spend money on things that we couldn't afford.
As I got older although I continued to be very budget conscious, if I decided I wanted a more expensive item of clothing I didn't hold back. I bought it anyway because I would wear that until it couldn't be worn anymore. Yep, I would literally wear it out.
I'm not an emotional spender and there is nothing here in my house that I regret buying. Actually, there is plenty more that I would love to get and I have every intention of one day doing just that too.
Thanks for your lesson and an important one it is too.
~Adrienne
~Adrienne