There are 3 parts to wealth building according to Save My Cents: 1) Spend less than you earn 2) Invest your savings 3) Increase your income.
However, there may be instances where you struggle with part 1 – “spend less than you earn”, and it’s actually a deeper psychological issue. I see this over and over in private coaching – The good news is, there is a solution! Keep reading to see whether you might fall into one of these categories:
You grew up with little from your parents, so you spend to self soothe
There’s a possibility that your parents when you were younger did not show you love in a way that meets your love language. As a result, when you are an adult, whenever you find yourself craving the love you felt you never had, you start looking for it in other things – including purchasing things and experiences that you believe will bring you those feelings of security. Because of this, you need to find a way to self love, that does not rely on external validation, in order to break free of this generational curse.
The book “The Five Love Languages” by Gary Chapman dives into this quite a bit
You are unsatisfied with your current romantic relationship
If the relationship that is most important in your life is leaving you dissatisfied with yourself, it is also very tempting to replace that lack of emotional bonding with something else. This can thus also manifest in buying things, going out on experiences, or seeking other forms of pleasure, and adds up when it comes to impulse spending.
You lost someone you loved
Death and grief can have lingering effects that last for months, if not years. Whether it is the death of someone you love, or the break-up of a long-term relationship (such as a divorce or break-up), these events hurt. They hurt our hearts to the core. And when our hearts are hurt, a hole forms, and we may be desperate to fill that hole in some way to replace the love and emotions that were lost. I have been through this and by the way, there is no shame in doing so. However, knowing that this is what is happening, might be helpful so that you do not blame yourself so much when this is the situation that is causing you to spend a lot of money.
The environment and friendships around you, use spending as a signal for happiness
This one is me. On social media, I would see people posting fancy meals, fancy vacations, and beautiful clothes. I kept forgetting that people often post their highlights, which maybe happened once or twice a year, but never their lowlights. With the constant barrage of perfectly curated meals and vacations, I started feeling like there is something wrong with my life for not looking like a brightly lit, pastel colored influencer grid. When all along, I also keep forgetting that influencers are paid money or in kind, to even look like that. Influencers don’t need to be models to influence you – more often than not, it’s friends. And our friends are the most influential because we see and feel their lives in a very real way, more so than strangers. Yet, everyone puts up a front. We all celebrate and make a big deal out of things to feel important, validated, and successful, and over time, we forget to celebrate the little things, to slow down and give ourselves grace. We forget to focus on what brings us meaning, and let others define it for us. This is where having a lot of self awareness and inner confidence is important, in order not to be swept up by the latest fads.
You are currently suffering from anxiety or mental illness
Be it general anxiety, depression, bipolar disorder, or something else, mental illnesses, even if not chronic, are diseases of the brain. I often say that our brain is our most powerful organ. What we feed it, what it believes, can change our lives. When our brain is not functioning optimally, it is hurt. That does not mean that there is anything fundamentally wrong with you. However, an injured brain has more trouble making optimal decisions. Building wealth, and having the discipline to save money, require long-term thinking. This thinking depends on our brain to think at the highest level. Ever heard of the term “lizard brain”? That’s the part of our brain that functions primarily on auto-pilot to help us with basic survival such as being in the right temperature, telling us when we are hungry, etc. The lizard brain is typically engaged in short-term decisions. It activates “fight or flight” to keep us safe.
Long-term money decisions don’t happen with the lizard brain, they actually happen in what is called the “neocortex” brain. However, when our brain is injured and in anxiety mode, we over-activate the lizard brain. We are unable to think long-term. We end up making a ton of decisions about money that seem to make sense in the short run, but really hurt us in the long run.
This is where abundance comes in. We can rewire our brain to make it think more long-term and towards abundance. We can reprogram our brains! (Caroline Leaf: Switch on Your Brain). We have to overcome the short circuits we have built up in our brains over time to do this.
Five Weeks to Abundance can help
Having observed the above scenarios in the people I coached over the years, I decided to codify what I had learned that allowed me to change my attitude and outlook on life to increase my savings rate, and teach it to you all in just five weeks of time. The Five Weeks to Abundance course dives into many of these scenarios, helps you identify how they currently manifest in your personal finances, and then gives you gentle, encouraging, and empowering exercises to help you become free of your past financial regrets. It is a proven methodology that has helped hundreds become debt free with joy. Visit this page to learn more about the course and how to purchase.
This post contains affiliate links to help keep the lights on at Save My Cents. It does not cost you anything to click on them and you are not obligated to make a purchase. Many thanks to sources such as Paul MacLean, Caroline Leaf, for creating the academic evidence and backing for the insights that I have summarize above.
