Just Listen to Jagger When It Comes to Finances

Remember the Game of Life board game? My favorite part was pretending to be the banker, which meant I counted and distributed the “play” money. That exercise helped illustrate a basic – but crucial – “life” lesson: When you run out of money, there’s no more to spend.

As an adult, you learn that’s only partially true – especially with credit cards, which pave a tempting path to overspending.

I’m not saying it’s easy, but here’s what I do as I longingly gaze at advertisements for Hawaiian vacations or elegant – but expensive – wardrobe styles: Begin silently singing what’s become my spending anthem – the Rolling Stones’ “You Can’t Always Get What You Want.”

I read an interesting Accumulating Money article describing a few reasons why people overspend. It notes that 43% of families shell out more than they earn each year. Here’s an excerpt: 

Keeping up with the Joneses – Psychology plays a big role in our spending habits. We want to feel as successful or more successful than those around us. We spend a lot of money to keep up that image. The reality is, the neighbors probably can’t afford that new boat either.

Plastic doesn’t feel like real money – It’s common to spend more when using credit cards than cash. The experience of handing over a card that you get back is just not the same as handing over some cold hard cash and seeing it disappear.

Immediate gratification – It’s all around us. We’re bombarded with the immediate gratification mentality. “Instant pain relief,” “fast food,” “on demand video” and the big financial one, “buy now, pay later.” We’re too used to getting what we want now even if we don’t know how we’ll pay later.

Can’t say no – Some people feel like a failure when they can’t meet the wants of others. Whether it’s new toys for the kids, new outfit for the spouse or a night out with the friends, some people just can’t say no, even when they can’t afford to say yes.