Debt Free

There are reasons everyone who’s in debt gets that way. Some are unavoidable, such as medical conditions, job loss, or maybe a natural disaster. Others however, are caused by some sort of overspending. What the hell causes people to consistently spend more than they make? In many cases, they’ve done considerable harm to themselves and their families, and yet they continue a pattern of overspending. It must be a syndrome or medical condition, as so many other behavioral situations seem to be in this brave, new century. 

Probably not, but that brings up an interesting question. Why do some people seem to consistently overspend? What is the psychology behind such behavior? Why is the pattern of overspending so difficult to correct? Stay tuned for the next half hour, as we look into these and other fascinating questions. In truth, some overspending is driven by behavioral disorders such as gambling addictions or alcoholism. I just spent 4 days in Las Vegas for a trade show, and can attest to the fact that some people definitely gamble too much and seem unable to control it.

What about those that just plain spend too much? They’re buying those new Edlebrock aluminum heads for that ’68 Nova in the driveway, or picking up their fourth pair of Loeffler Randalls. Is it self esteem? You know that these days it seems that a lot of emphasis is placed on self esteem. Perhaps you don’t realize that when you whip out that Visa card, you’re actually spending real money. According to some experts, it seems that for some, there actually is a disconnect between associating credit cards and spending money. You’d think that would evaporate about every 30 days or so, but maybe not.

Getting back to the whole concept of self esteem issues driving consumer’s deficit spending, it’s ironic to realize that trying to bolster self esteem by spending money to acquire material positions and have fun doing things such as traveling, can actually further the very problems that contribute to the self esteem problems in the first place. Some people have low self esteem due to what they perceive as lower income than they feel they deserve or lower than others in their social circle. Spending to purchase what others are buying helps to generate a feeling of equality and raise the individual’s self esteem.

The irony here is that, by deepening the individual’s debt, they are denying themselves the very financial success that they seek in the first place. As they sink deeper into debt, they are just that much farther away from that place among their peers that they desire to emulate. Weird, huh?

As I stated in a post back in September about a budget being like a diet, you need to change your lifestyle to be successful in beating the debt death spiral. What I mean is that you need to identify the root causes of your spending habit and fix them, just as you would if you were attacking a weight or health problem by revising your diet. Here then are some of those root overspending causes you may want to take look at:

1 – Medical or psychological problem such as gambling or alcoholism

2 – Spending disconnect when using a credit card

3 -  Low self esteem

In addition, a 1993 study of consumer debt by Webley, Lea, and Levine at University of Exeter in the UK found that other psychological factors possessed by those in serious consumer debt included the following:

1 - Nonconformist, Agnostic or Atheist religious outlooks

2 – More permissive toward debt, but also were more likely to hide the fact they were in debt from others

3 – Knew more people who were in debt than did the non indebted study group and identified with them

Hopefully this will help you recognize such factors in yourself, if they exist, and change them for the better. After all, when you’re trying to get debt free, you need every advantage you can get.