Beyond Budgets: Redefining Spending Problems

So you’ve heard that someone you know may have a spending problem. You might even think you have a slight spending problem yourself. What is the first thing that you think they (or you) need to do to get back on track? Responses I commonly hear revolve around getting on a budget or pulling themselves up by their bootstraps. 

The problem is we can’t assume they know how to budget, or that they’ve already tried and failed to stick to a previous plan. Many times it’s something else.

We know that willpower is not the strongest of brain functions and neurological research is continuing to affirm this. 

Which leads to another assumption, that overspending is a behavior issue and can be modified through behavior modification. Not always.  

When overspending isn’t fixed through simple budgeting, it communicates that there’s something more at play. So what is it that goes into the problem of overspending? 

The definition of overspending is often too narrow. For our purposes, I will defining it as buying more disposable goods and services then one currently has money for. See, we can overspend on services like health care out of necessity.

Overspending may be traced through at least these different areas for resolution: 

Personality Type – Some people live in the present without much future orientation. They are intuitive, living and making judgments based on senses and feelings. These kinds of people may be less likely to rely on and stick to a budget since that’s not the way they naturally process information. 

Family of Origin - Each of our families strongly influence the way that we view and use money in our life. If our families overspent money, then that pattern is likely to re-emerge in our own lives. Even if the activity is different, the pattern of overspending or undersaving is common. Families have a gravitational pull on us.  

Financial/Personal Trauma - When we have experienced a significant loss, we may develop a sense of brevity or life or financial security which alters the way that we think about the resources that are available to us. Bucket list pursuit is amazing if you know you only have a short time to live, but if you blow everything and still have 30 years to go then you may find yourself in the throws of difficulty.  

Cultural Influence - For most of us it is hard to fully escape the consumer society that we live in when the mission of business is to get us to buy more. The temptation and ease with which we can spend pulls on us strongly and only those with nerves of steel (very few people) can resist the beckoning of making too many purchases.  

I am not releasing us from our responsibility of making wise decisions with our resources, but I do want us to develop what Brene Brown calls critical awareness —  the ability to move from a general understanding of an issue to a nuanced understanding of the many factors that may be contributing to the problem. 

We Get Along Financially, Except

When I tell people that I am a marriage counselor that specializes in working with couples and their money, I usually get one of two responses. The first is diving straight into the details of their marriage and financial lives and some specific event that happened to them.

The other is a more cautious response. It goes something like, “We are really fortunate. We get along well on that page.” Then there’s a positive explanation about how good things are. As I listen for a bit, I acknowledge and say that is wonderful.

Recently I was talking with a doctor who thought my work was really interesting, and he said he and his wife get along well in that department. He went on to say “We are blessed”. To which I responded great not expecting much after that. Then came the exception, he said my wife thinks I have too much insurance. I think oh, is that so? Now this was a social setting so I did not get into the details, but this is one of many examples of what I hear once someone feels safe enough to share with me about their life. The reality is that we all have financial sticking points in our marriages. So the question becomes, are these sticking points driving a wedge into your relationship with your spouse? Is it affecting your ability to enjoy each other’s company?

Most couples can navigate a few minor disagreements, but stack a few together and the stress increases. The reality is that there is often both an emotional cost and a financial cost when it comes to financial differences.

In the case of the insurance for this spouse, it was a common source of tension. Even if for this doctor he is spending $200 a month in extra premium for insurance that is not necessary—that adds up to $2,400 a year. Peace of mind just became more expensive for this couple. But the bigger question becomes why is this insurable risk so important to the person?

Without knowing the details, we could assume that it was a disability policy that the doctor has. But the policy might not be technically necessary for a number of reasons. Beneath the surface the of that decision the doctor's father became disabled at a young age, and that memory lays in the back of his brain about the need for disability insurance. Perhaps this is not a connection that he has made, but it then becomes a clear explanation about his desire to have more disability insurance than would normally be reasonable. Further yet, the disability was caused by a motorcycle accident. The doctor does not even own a motorcycle and won't ride one. So does he really need this disability policy? Perhaps not. Hopefully this demonstrates that insurance policies can become about meeting more of an emotional need than a financial need. Yet if we remain overly-insured based on subjective needs, then we may be cutting off cash flow that could be used to allocate towards other important goals for the family.

Affluence Guilt and Shame

What is “affluence guilt?” It is when you feel insecure, frustrated, or shameful that you have more financial resources than another person or group of people. At a global level, we can sometimes feel this as U.S. citizens. Even if we personally don't think we have that much money, when we are told that we are the richest nation in the world and look at what a less affluent country has in comparison, it can induce guilt and shame.

Researcher and shame expert Brenee Brown defines guilt as coming from what we have done and shame as coming from who we are. 

At the individual level, affluence guilt and shame comes into play when recognizing that you have more money than your family, friends and community members. This realization often leads to feelings of insecurity, frustration or embarrassment. What if you have truly pursued your passions and have ended up in a position where you are able to earn a great living and have more than others --is that something to feel guilty or shameful about? No. There are however five groups of people who are likely to experience affluence guilt and shame.

1. First-generation professional athletes

2. People who are making substantially more money than their family (typically those with an advanced college degree)

3. Successful entrepreneurs who end up making more than they ever imagined

4. People marrying into a high-income/net-worth family

5. People who receive an unexpected inheritance/windfall

From psychology we know that, when we feel guilt or shame, we will use a variety of different coping mechanisms to release the guilt. The challenge is that, while the coping mechanisms often provide short-term relief, they are not a long-term solution.

So, what impact does affluence guilt and shame have on the way that you manage your resources and relationships? The most common and easily recognizable impact is the under-accumulation or rapid spending down of assets (i.e., net worth impact). For every level of income, there is an expected ability to manage your resources in a way that will be able to support your current and future needs. Yet those who feel guilt and shame about making or having large amounts of money will tend to under-accumulate resources because they can't imagine themselves as being the person that has sufficient resources. Having negative connotations attached to affluence causes subconscious actions to occur and sabotage efforts at appropriately managing resources.

Affluence guilt and shame also impacts the way that we manage personal relationships. Let’s say that you have a friend who you know is making much less than you are, and you feel bad that they do not have the same resources as you. You may find yourself buying things for them that they didn’t necessarily want  because you feel insecure about your level of affluence. So, you take deliberate and intentional action to make sure that they are provided for. Unfortunately, all too often, this reinforces the divide in resources and can lead to resentment and withdrawal from the relationship. 

The journey of living with affluence takes work. It has its own unique set of challenges and opportunities. When you take intentional steps towards learning to live with affluence it can provide both great personal satisfaction and positive change for the world.   

Feel free to give me a call to talk more at 980-275-1627.

Ed Coambs

Edited by Reena Arora of Arora Media, connect on Facebook

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Are You Living the Good Life and Don't Even Know It?

While cliché, it is so true that we get "wakeup calls" in life that tend to bring everything back into perspective. The wakeup call by its very nature crops up at the most peculiar times and in the most peculiar places. For me, it was when I found out I had melanoma (a form of skin cancer that can be deadly if undetected), or more recently, a Sunday morning when I was sitting in church learning about the deep needs of Haiti. These wakeup calls summoned me to evaluate my own circumstances and ask, “Am I living the good life?” Upon reflection, I realized that, while I do not have everything I want, I do have everything I need. Learning to live in this realization is where deep contentment occurs. Too often, I hear people say that contentment leads to complacency, but what I have found is the opposite. When I am content, I am most motivated to continue to grow.   

So, how do you know if you are living the good life? First, you must take the time to define for yourself what that actually means. The challenge (and temptation) is to base your definition of “the good life” on what others have or are doing, but that’s not necessarily true and authentic to the way that you have been called to live. Sure, the perception of other people's circumstances will always be out there. But you must define for yourself what your good life looks like. What makes sense for you? 

The process of defining the good life will look different for each person. For the highly structured and organized person, it may involve making a list and add definitions. For the visual person, drawing may help them identify the characteristics of their “good life.” Take some time to express in your own unique way what your good life looks like. Release the pressure of coming up with a definition quickly. If it needs to develop over a period of time, allow that to happen. The point is to be true to yourself through the entire process.

Once you have developed your idea of what it means to live the good life, take some time to think about your current situation. Where is there consistency in what you define as the good life and how you are living now? Where can you identify inconsistencies? As you reflect on these questions, consider that if there is 70 - 80% or more of your good life characteristics present in your life now, then you ARE living the good life. If your definition changes, that’s okay. In fact, it’s normal and healthy.

So, take a moment and look up to see that you are already living the good life. It is not “out there” somewhere, It is right under your nose.

Take this exercise one step further and include your spouse in this process. Remember, your definitions do not have to line up perfectly, but hopefully, there is overlap. 

Feel free to give me a call to talk more at 980-275-1627.

Ed Coambs

Edited by Reena Arora of Arora Media, connect on Facebook

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