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How Psychological Pressures Change Your Spending

By Frugaling 14 Comments

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Burger Food Photo Minimograpy

Over the last month, I’ve been working on my dissertation. While writing this tome, I’m continuing clinical work at a local VA, instructing two courses, and creating scholarly papers. This might be the busiest moment of my life. And in about a month, I’ll need to hand over a draft to my adviser. And he’ll decide “go” or “no go.” My future depends on it.

The symptoms of this pressure are powerful. I’ve struggled to write, become a nervous wreck, and have unending indigestion. My stomach burbles and gurgles with unease. Simultaneously, Frugaling has been unusually quiet, and I’ve been shocked by the emails from regular readers wondering how I’m doing (you’re so sweet!). I’ve been unable to write as much as I like.

Eventually the dissertation writing will end. But I can’t help but think, I need to succeed. I’m in control of this moment, and I’ve never been more motivated.

Unfortunately, as I’ve focused on this one area, a handful of others things have faltered. Control in one category, has led to failures in others. It’s like my brain can only concentrate on a few things at once; then, it descends into reactive, non-conscious action. My reptilian brain takes over, and I let autopilot handle the controls.

My ideals of frugality and simple living have taken a back seat to this burden. Even after two years of Frugaling, I’m embarrassed to say I still struggle to maintain a budget when the stress hits the fan. With nearly every moment hunched over my keyboard, hammering away at keys incessantly, old habits are returning.

The inner voice says, “I’m too hungry to wait for home. I want to treat myself for writing so much. I need a break – give me that large popcorn.” Me, me, me, me, me. I crave candy, quick meals, and snacks at strange times. Yes, I want that fatty burger and fries. Yum! All I want is to swipe a worry away and not feel guilty for doing so. Suddenly, I can spend $60-70 in a day’s worth of food. Poof!

These moments highlight the complexity of changing a budget and spending less. We can make great alterations to our lives, and still relapse and regress. It happens. And I think I know why.

See, the first 24 years of my life, I didn’t watch spending, create a budget, cook at home, avoid student/car loans, bike to school/work, or look for ways to save. My brain developed a pathway and logic to deal with nearly everything over those years, including when to eat out, buy a car, etc. Frugality wasn’t in the mix, and it got me into 5 figures of debt.

It’s hard to change anything; especially if that’s all you’ve known. The neuronal structure has developed a keen appreciation for certain types of rewards and feedback. Simply put, my brain expects me to spend when I’m stressed. To change this pattern of behavior requires repeated corrective action, recognition of when I’m slipping, accountability from friends/family, and other reward mechanisms.

One of my psychology textbooks curiously likes to say that after about 6 months of change, a habit can stick. Well, I’m here to tell you that’s not always the case. Despite a couple years of successful behavioral change, I occasionally fight to regain control and relapse to old spending.

Various factors work against me. Twenty-four years of bad habits and a society full of encouraging messages about immediate gratification stack the deck. It’s an uphill battle, but I’m better at waging it than ever before.

I might not have perfected my budget but change has occurred. Today, I can realize when everything is falling apart – spending has gone haywire – and stop. Today, I can write this letter of accountability to you all. Today, I can admit faults while acknowledging strengths.

Frugality isn’t about dogma or perfection. We’re on a journey – together – to find ways to save, spend less, and recapture control when we lose it. There’s power in these lessons and the brain – while stubborn to change – does slowly cooperate.

Filed Under: Save Money Tagged With: brain, Budget, busy, change, college, dissertation, Habits, Life, Psychology, school, spending, Stress, Work, Writing

5 Essentials For Paying Student Loans

By Frugaling 9 Comments

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Student loans net work Mint.com account
My student loans were careening out of control. Now, I’m looking at the finish line: zero debt.

Today, I paid off more student loans than ever before: $4,000, to be exact. This hefty deposit was made directly to my loan servicer, which will pay off federal aid debts. In May 2013, I had nearly $40,000 in debt. I was careening out of control, and my only solution was to take out more student loans. Instead, I started Frugaling and changed my entire financial future.

Even though I’m making more money than ever, it’s important to safely and smartly pay off debts. While it’s best to prevent excess debt via proactive budgeting, paying it off can be dangerous, too. In my situation, I paid off this huge chunk of debt by following the proceeding five essentials. Hopefully these will help you to safely pay off more student loans than ever!

1. Pay Off Active, High Interest Student Loans

Okay, I’m going to get a little technical here. I have two types of federal aid: A and B. My “A” loans are subsidized (no interest gaining) until I graduate from school. Unfortunately, my “B” loans are a running taxicab of interest and piling debt.

The first goal needs to be paying off high interest student loans that are active. My “A” loans are not active, and as such, do not need to be the focal point. Meanwhile, my “B” loans are ticking along at about 6.7% APR. All my energy and funds are going towards these second, active interest loans right now.

2. Pay Off As Much As Your Budget Can Bear

It’s tempting to start taking some of my newfound money and buy things. Somewhere between things I don’t need and things I’ve long wanted – oh, how wonderful that would be to buy the unnecessary but awesome!

To prevent this human reaction, I’m digging deep and paying off an uncomfortable amount of student loans every month. It hurts to pay this much because I feel uncomfortable having this little in my savings/checking accounts. Conversely, it helps me pay off more each month, and prevents needless purchases while my budget is being corrected. The less access to money you have, the less you’ll spend!

3. Subsidized Loans Are Free Money While In School

The “B” portion of my loans are my enemy, while “A” is a friendly sort. My student loans started out as a subsidized group, when the country cared about educating the masses affordably and fairly. That’s sort of changed.

I have $8,500 in subsidized loans that are protected from gaining interest until I graduate. Phew! This mass is scary and will be a priority at some point. While I’m in graduate school, I’ll aim to stock up my bank account, build an investment portfolio, and diligently follow my budget. Later, after I graduate and the interest becomes active, I’ll redirect this built up liquidity to quickly pay off the rest of my loans.

4. Keep Some Handy For Emergencies/Tax Season

This might seem contradictory, but part 2 says pay as much as you can possibly bear. Does that mean you should scrap any emergency funds to pay off student loans immediately? Well, it depends on your liabilities.

As a car owner, with certain financial obligations, I need to have some money on hand in case something goes awry. Likewise, this is the first tax season where I’ll be paying Uncle Sam. While I’m happy to do it, I need to prepare for significant budget buster in mid-April (when my payment is scheduled). The key here is to pay as much as you can, while insuring yourself against totally tragedy.

5. Recognize Your Accomplishments

giphy

Bring in the reinforcements! Good habits are largely built from strong, positive reinforcement behaviors. Pavlov and Skinner are the two psychologists credited with founding the field of classical and operant conditioning. If you’ve ever taken a psychology course, you’ve likely learned about them.

Those two stodgy, crotchety scientists were pioneers in the field of education and behavior management. Skinner’s operant conditioning reinforcement schedules are as important as ever. Simply put, when you’re done paying off a significant chunk of student loans, reward yourself! Today, mine will be an extra coffee before work. What’s yours?

Filed Under: Loans Tagged With: Budget, debt, graduate school, Habits, high interest, loan, positive reinforcement, skinner, Student Loans, subsidized, taxes

Conquer Your Urge To Spend?

By Frugaling 7 Comments

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Quicksand Picture
Photo: hoodooyoudo

Deep within the recesses of your mind are primal, animalistic urges to spend more than you should. We are born and bred to consume and prosper – shopping comes easy. As the Black Friday madness shows, we can easily gorge on the materialistic desires that haunt us. When we set budgets and realize our fallibility, the urge to spend can easily be replaced by grit to overcome. It is at this point that we are effectively fighting our demons and the unbalanced budget.

Fighting is tiring

But have you ever been in a fight? Whether emotional or physical, fighting is tiring and draining and scary. It strikes a similar but different evolutionary instinct, and can lead to severe psychological distress. Frequently, future frugalers get frustrated by their urges to spend, and punish themselves by cutting credit cards and focusing on creating a rock-solid monthly budget. I’m afraid this energy is misdirected, at times.

Oft-repeated cliches about making more than you spend and creating an emergency fund are abstract concepts, goals that miss the steps needed to get there. More fundamentally, even the steps ignore the reasons behind your desire for change – to become more frugal. What is motivating you to save money and have a better life?

From foundations comes successes

See, what the personal finance world is missing is credit for the psychological foundations. Everyone comes with a certain amount baggage and history. This past influences how we treat money and save (or not). Without recognizing this past, we may not be able to recognize where we err in the future.

In the past, I had a piss poor habit of going to malls to browse and shop because I loved the smiles and energy. The aromatic storefronts welcomed me, clothes glistened from spotlights, and the service was friendly. The problem was most pronounced when I felt alone and/or unfulfilled. Bottom line, for me, shopping and spending beyond my means was directly related to loneliness and purposelessness.

Realizing your own need shopping and/or unbalanced spending leads to a foundation for change and budgetary hope. A house cannot be built without a foundation. But more fitting, a house cannot be afforded without a budgetary foundation. How do you become aware of your motivation for wanton spending?

quicksand cat can haz cheeseburgerThe metaphor of quicksand

Remember those old movies where the bad guy falls into a pool of quicksand, and the more he struggles, the faster it sucks him under? In quicksand, struggling is the worst thing you can possibly do. The way to survive is to lie back, spread out your arms, and float on the surface. It’s tricky, because every instinct tells you to struggle; but if you do so, you’ll drown. –Russell Harris

Debt and financial despair is like quicksand. The more you fight to get out of it, the harder it seems. It is easy, when you’re working to improve your situation, to berate and punish yourself for these ills. Fortunately, there’s another way – a paradox of sorts to becoming frugal and financially solvent.

As the quote says, if you build a foundation for a different reaction to your struggles, you may find calm. In calmness, we can begin righting our course and find a balanced budget. Deficits can be defeating, but they don’t necessitate a battle.

Fighting, flexing, attacking, and breaking your need for spend is a recipe for disaster. Rather, relax and reason are the solution for a positive future. Now, you’re ready to save money with mindfulness!

Filed Under: Save Money Tagged With: Awareness, Budget, Calm, debt, Fight, Finances, Frugal, Habits, Mindfulness, Psychology, Quicksand, Shopping, Solvent

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