My neighbor Tom has the biggest heart… and the biggest house, the biggest truck, the most outdoor furniture one backyard can hold, and three garages stockpiled with stuff. He’s our neighbor who loves to host every neighborhood party featuring everything you could wish to eat or drink. He seems to have all the advice on the best vacation destinations. And, he is the first one to give anything away upon casually overhearing that someone is in need.
Although my husband and I do our best to be polite and gracious of his friendship and goodwill, we often wonder at what cost Tom does all of this, both financially and personally. Tom and his wife do well for themselves, this much I know.
But, even for them, the pace at which they accumulate and then give away makes me nervous. I worry for them even though I’m not invested in them in any way except through the care I have for them as a result of our friendship.
Growing Up Poor
Tom grew up dirt poor in Alabama, watching his mother try to scrape meals together for him and his four sisters on a nightly basis. As soon as he was old enough to work, he did so, contributing as much as he could to the family.
And just as he turned 18, he enlisted in the Army. Since then his income has steadily risen with the help of retirement at 38, a second career, and increased household income with his marriage.
To me, Tom seems to be a perfect example of how growing up in poverty affects spending habits as an adult.
According to many studies, including one published in the Journal of Psychological Science, “People who grew up in lower socioeconomic status environments were more impulsive, took more risks, and approached temptations more quickly.
Conversely, people who grew up in higher socioeconomic status environments were less impulsive, took fewer risks, and approached temptations more slowly.”
It Takes One To Know One
I’ve been there… where Tom is now. And, I admit it takes an immense deal of discipline to avoid succumbing to an irrational need to spend.
There were times in my childhood my mother would take us out to eat at restaurants I knew she could not afford, only to come home to no electricity in the house because she had splurged on dinner with money that could have gone to the utility bill.
The Spending Rationale
People like myself or my neighbor, who have grown up with scarcity, often feel a sense of urgency to spend when money comes our way.
I’m not saying everyone is like this. Some people react to wealth in a completely different way, hoarding it because they’ve been without it for so long.
But for the rest of us, the ones who feel the need to spend money to feel like we belong, to validate our own financial good fortune, our solid financial ground can become suddenly very slippery.
See The Signs
Growing up poor, or even a little strapped for cash is not uncommon. In fact, it’s a large part of the tale of the middle class. Many of us grew up in “paycheck to paycheck” households.
The problem is that in a culture of consumerism, the ease at which we are able to embrace spending prosperity by reacting to past scarcity leads to financial destruction and significant personal debt.
The best thing we can do to fight back is to recognize individual behaviors that are financially unhealthy.
It’s okay to want things, no matter what kind of financial circumstances you come from. The difference is that people who grew up more financially secure tend to practice more restraint than those who grew up poor — on a whole.
A good way to make sure spending is done in the right areas is by setting a purchase goal.
If you’re dying to go on that much-needed vacation, but feel like you never have the airfare or hotel money you’d like because of your spending, create a financial goal and put it in writing.
Keep your new vacation goal on paper where you can see it. Every time you have the opportunity to spend, ask yourself if buying that item is worth not moving closer to your vacation goal.
Meanwhile research the best ways to achieve that goal while saving money – whether that be through capitalizing on airfare deals, following low cost vacationing tips, using the best credit card for airline miles, or considering a vacation home rental.
I know this is so much easier said than done, but if you know you’re one of those people like myself who struggle with spending, choose your credit cards wisely.
Instead of looking at them as lines of credit for a rainy day, or the next big purchase you don’t quite have the money for, use them as opportunities to make money.
Keep the number of credit cards you own limited and choose the best credit cards for travel rewards or cash back. Pay off your credit card debt every month — no exceptions.
Understanding the psychology behind the itchy “need to spend” feeling will help to say no to the next purchase a little easier.
Taking a pause before pulling out your wallet will help you keep impulse at bay. Setting goals will help you keep your spending goals focused.
As time goes on and your savings account grows larger, the security you felt by buying things you never had as a child will be replaced by having a nest egg you never even conceived of in your youth.
Naturally impulsive people aren’t the only ones doing all the spending in American marketplaces, both brick & mortar and online.
Americans owe over $900 billion in debt, collectively. Those who grew up with nothing often feel a need to own more to fit in, or may be more likely to succumb to the desire to have something because they feel like it may not be possible to own it in the future.
Being aware that you’re feeling the impulse to purchase something, then consciously choosing to take a step back to ponder more on the purchase, is the first thing you can do to be more financially secure.
About the author: Kelly Berry is a blogger at JohnnyJet.com, a travel advice blog filled with plenty of personal experience travel destination stories, and tips and tricks for saving money while traveling all over the world.