Wednesday, August 24, 2011

Psychology of Debt

We were reflecting the other night about how our thinking habits towards spending have changed since getting out of debt. In many ways it's been rather ironic.

When we were paying back loans and living on a very tight budget, we quickly fell into this line of thinking: "We have no money. I'm sad and depressed that we have no money and frustrated that we can't spend anything. I would feel happier if we went out and looked at all the pretty things we can't afford."

Hmmmm...any guesses on what would happen next?

Ironically now that we don't owe anyone anything and technically could do a bit more impulsive spending, we find ourselves thinking: "We actually have a little bit of money. That makes me very happy." And that's where the conversation stops.

It's been a shocking revelation at how much our frustration and unhappiness would lead to the impulse to buy something. I know there have been hundreds of studies done on that, but it's been another thing to experience the difference.

I don't know if that has been anyone else's experience, but it's kind of sad how much emotions can determine our thinking and actions.

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