In addition to celebratory spending there is also the opposite. When people are miserable there is a rush to go for some therapy.
Each and every consumer is prone to a little RETAIL THERAPY
People overspend for a variety or reasons including stress relief, pleasure, to overcome feelings of inadequacy and to feel important, telling themselves,
Once the money is out of your wallet, you may start to feel guilt and a tirade of justification will begin. “I deserve this.” Have you ever gone out and bought yourself something you know you cannot afford and the reason is you deserve it? And why do you deserve it. You’ve had a rough day; your boss shouted at you; you got fired; your boyfriend/girlfriend/husband/wife left you; you lost a client; you made no sales; you lost your phone etc.
Any person of sound mind can see that these thoughts, while they may promote a spending impulse are potentially dangerous reasons to part with your hard earned cash.
Some people practise wishful spending where they use credit repeatedly and convince themselves they will have the money by the time the bill arrives and if they do not they just keep on wishing. Wishing does not pay the bills.
BUY NOW PRAY LATER!
You get caught in the cycle of buy now pray later and the allure of credit over cash, convincing yourself, “It’s very affordable at $15 per month – I’ll pay it off.”
Looking at bills in monthly instalments takes your focus off the overall debt and helps you live in denial and could be the beginning of a spiraling debt scenario.
When you look at four accounts of $10 to $15 each per month, the debt looks manageable, but when you look at the bottom line – it could be $6000 over the next three years. For each late, short or missed payment the debt gets bigger with finance charges. Add the growing figure on your credit card with interest charges of 25 per cent, per annum and you start to see the big picture.
IGNORANCE IS BILLS
Closely linked to denial is ignorance. Many people don’t even know their net income, never use a budget and they don’t pay attention or want to understand how interest charges come about.
You start out paying off you credit card balance in full every month – then you have a medical emergency. Under this financial burden, the payments are forgotten, missed or late and the amount is just too big to manage so it just gets bigger and bigger each month with added interest plus your normal monthly expenses that you are used to paying for on your credit card.
You enter a debt spiral and begin to lose control. But you know that if things go well it’s because of you but if they don’t go well, you’ll find someone or something to blame.