In case you are wondering how this has anything to do with your financial freedom let me tell you a story…
Sue, a 30 year old executive account manager was working on her biggest deal yet! If she got Pete signed up to their agency, she’d get a massive bonus. She impressed Pete in their meeting at that fancy restaurant, told him all he wanted to hear to convince him to go with Sue as her marketing manager. When the bill came at the end of the meeting, she quickly handed over her credit card in an I’ll take care of it fashion, just to be told a few seconds later that her card was declined.
After she just showcased her competence in her field, showing her understanding of Pete’s needs and feeling like it was a done deal, her hopes of that vanished rather quickly. Sue was disappointed when she got home she put down here Prada bag, Gucci watch, and Channel costume before she fell in a heap. Sue’s $1,000 shopping spray the day before, with a high existing balance on her credit card put her over the limit, and cost her a $100,000 dollar deal.
Being a shopaholic is not cute.
In fact it is about as attractive as being an alcoholic or a drug addict. Although Hollywood has made several comedies about being a shopaholic, it actually masks a couple of issues to point out straight up. First is that the use of a credit card with a large balance shows that Sue does not know how to manage her money. She is putting her purchases on a high interest rate loan in effect that is designed to keep you in debt.
The second is a question of self-worth. Would she not feel good enough or competent enough in her field without having to go into excess expenditure trying to impress? Instead she numbs the feeling by an injection of ‘happiness’ by buying stuff she doesn’t need.
When the thrill of the new shoes, clothes and bags wears off, a shopaholic is left with a huge bill to pay and zero financial flexibility to do what she really wants, let alone build any savings. Not to mention the guilt and shame that comes with the predicament she finds herself in.
Constant overspending leads to debt, debt leads to stress. Stress affects our health, relationships and the quality of our lives. Debt is also the number one reason for relationship break downs. Debt can ruin lives. It’s like a ball and chain around your ankle. It holds you back from building the life of your dreams.
The first step is to recognise this problem. It can be hard as growing up you may have had a role model displaying the same habits so you could consider this as a normal way of life. Not to mention the fact that there was never any financial literature taught in schools, so how could you have learnt how to manage money, make money and love money for the opportunities it can provide?
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