My name is _ _ _ _ _ _ _ _ _ and I am a spendaholic.
With the holiday season over and the new year ahead it’s time to reflect on 2013 and plan for 2014 and beyond. For many people 2014 will be an attempt to exercise more, eat better and spend more time with family. For others it will be an attempt to take control of their spending and subsequently their financial lives which, on some level, means beating an addiction to spending.
Addiction can be characterized by an inability to consistently abstain from harmful behaviour, impairment in behavioural control, diminished recognition of significant problems with one’s behaviors and interpersonal relationships, and a dysfunctional emotional response. Like other chronic diseases, addiction often involves cycles of relapse and remission. Without treatment or engagement in recovery activities, addiction is progressive and can have severely negative long term consequences.
To help fight the spending addiction that affects so many I have devised a 7 step program which is loosely (extremely loosely) based on the tried and true Alcoholics Anonymous 12 step program. My program has a few less steps and none of the religious references, finance is the only religion preached on this blog!
Admit you are powerless over spending – This may seem drastic but if you have a history of spending too much then the first step is to recognize there is a problem that, if not addressed, could negatively impact your long term future.
Make a decision to turn your spending and financial life into something to be proud of – Instead of worrying about what has happened in the past, make a decision to move forward using the right approach and be proud that you are on the right track now. You will be surprised in the sense of pride that comes with getting rid of that credit card debt or consistently building an investment portfolio for a purpose you really care about.
Make a list of spending priorities – Starting with your musts (Food, housing, education, security etc.) and moving down to your wants (holidays and material things). Then decide where the best place for your savings is based on the timeframe and importance of each priority. The table foosball table or jet ski may need to be put on hold for a little while!
I love to see people get excited about investing instead of blowing their dollars! A couple that I help with their finances recently commenced a portfolio that they are calling their “Free Holiday Fund”, the aim of this fund is to get the balance to such a level that they can take holidays using the investment income generated by the portfolio. They are essentially sacrificing a few years of large holidays now for unlimited holidays in the future. Not a bad trade in my books!
What are you going to name your savings account or investment portfolio to excite you about changing?