Family Issues

Some people who have huge loans and pending debts just needed a little education on how finances are managed.  They may not really know the difference between a simple interest and a compounded interest.  They may not know the implications of taking a longer loan term.  But other people who are in over their heads with burdensome loans and mountainous debts may need more than informative education.  They may need to take a closer look at how they view money and their self-worth.  They may even need to consult a counselor.

Many people today are shackled with financial worries such as meeting the minimum payments on credit cards, rushing to deposit money in the bank due to an issued check that will be due the next day, and facing solemn-faced creditors of representatives of collection agency.  Yet, despite all these energy-draining consequences of not budgeting one’s money wisely, the same people keep using their credit cards to buy unnecessary items and keep taking out payday loans

Studies conducted about such spenders reveal that the use of credit cards does not imprint on the minds of the spenders that they were actually using money.  One psychological theory states that a person’s action is reinforced if the consequences are positive and that the action is terminated if the consequences are negative.  Based on this theory, psychologists hypothesized that the person’s action of using the credit card is associated only with the satisfied feelings of acquiring a new possession.  The use of the credit card is not associated with the disconcerting and foreboding feelings of receiving the credit card statement, since the statement arrives perhaps a couple of weeks later.  People who use cash to pay items are less willing to spend than people who use credit cards.

The same studies reveal that people who have the urge to spend impulsively have low self-esteem.  Buying unaffordable items temporarily compensates for their feelings of inadequacy and that these expensive items will symbolize their self-worth.  Unfortunately, even millions of dollars cannot afford self-esteem nor procure self-worth.  These are intangible things that reflection, inspiration, and meditation can help develop inside a person’s psyche.  A counselor may help, too, but only as much as the person will allow.

If a person continues to ignore why he keeps swiping his plastic card to buy things he won’t use again after a few days, then he will never control his spending nor get out of debt.  He will never solve his deeper psychological problems.  He will always struggle to pay monthly dues.  And he will always take out payday loans, a situation in which he uses his coming wage to pay off his yesterday’s expenses plus interest.

Tags: budget, Debt, Credit Reports, Unpaid Debts, Bad Credit