Yesterday we spoke of creating a financial diary for a month to raise awareness of where the small change goes. Today, I want to speak about the emotions that affect our spending patterns.
Either review your month, or better yet start a new month of keeping a financial diary. Only this time, note the feelings that accompany each expenditure. Remember this is a private dairy so you can be completely honest with the process. Are you more likely to buy that expensive cup of coffee in the morning because you need a lift to start the day? Is there a tendency to buy a candy bar near the end of the week because you are growing weary of the grind? Do you tend to reward yourself with a little treat when you have just endured a hard interchange or even when you have accomplished a significant task? Somebody coined the phrase “small indulgences” to explain some of our decisions. I’ve finished this really challenging project. I “deserve” to treat myself to a pair of shoes, a hot fudge sundae, a movie, etc. None of the above is wrong in itself but it can easily become a pattern that causes a problem. By keeping the emotional-financial diary, you are able to evaluate your own emotional response to how you are spending your money.
Try it. You will probably be surprised at how often there is an emotional element to financial spending, especially in the small things.