Spending Mentality UK: How Your Mindset Impacts Your Finances
You can earn as much as you want, but if your mentality with regard to spending is not correct, even generating 1 million per year won’t stop you from running into financial issues
Understanding Your Spending Mentality
Societal pressure or trying to “Keep up with Joneses” can push a person into a financial situation that they may never have imagined they would be in.
We live in a world where every time you turn on the TV or if you’re on YouTube or Instagram, an advert is shouting BUY at you. “You need this," you might hear. You didn’t five minutes ago, but the advert tells you it’s now necessary.
You can reach the stage where you don’t know the difference between a want and a need.
The Impact of Societal Pressure ("Keeping Up With the Joneses")
How do you determine which is which?
Needs vs. Wants: Knowing the Difference
Food, water, and shelter are all important for survival; these are examples of needs. Just because you use the word “need” in a sentence when discussing an item you want does not make it an essential item.
“I need a new washing machine.” This may come as a shock to some people, but there are people all over the world who have never used a washing machine in their life. As this is not essential for your survival, it is a want.
Now, we get that in the real world, a washing machine is a pretty essential item for everyday living; we are realistic. However, when you start confusing “wants” with “needs,” you risk having a spend mentality that can lead to financial difficulty. Our article, *Luxury v Necessity – How to Spot the Difference*, will help you understand more about this subject. It’s in the purple box below.
Key Factors Influencing Spending Habits
Childhood Experiences and Spending
We mentioned before that societal pressure plays a big factor in people’s spending. The founder of The Real Debt Guy told us this story. He said:
“I remember needing a pair of Nike Air as a child so I could fit in with the rest of the kids no matter how much it cost or how long it took to save. I used the word "needing" deliberately because, at the time, it felt like an absolute necessity so that I wouldn’t be teased. As an adult, I realised that children will always find something to tease you about. At the time, it was just about fitting in with the crowd.”
The Real Debt Guy
This mentality doesn’t stop at childhood for some people; it follows them into adulthood.
The "Spend Circle" Explained
Their spending gets more significant as they try to keep up with the Joneses. If they don’t have the income to finance it, credit can come into play, and things can go very wrong. Being mentally strong with spending is essential. Funnily enough, we have an article called Keeping up with the Joneses in the purple box below. You will learn about a term called the Spend Circle.
Preventing Problematic Spending
We’re not just about providing information to help you tackle debt. We want to ensure you never get back into financial problems again.
It’s not just about putting a plaster over a cut; we want that area to heal stronger than before so it never reopens. This is why we encourage you to keep up with your finances.
Staying on Top of Your Finances
Spending plays a considerable part in people getting into debt. So, make sure you regularly use our free budget planner to stay on track, and if you ever feel alone, our community is here for you anytime.
