The Money Podcast Six Weird Things That Erode Your Wealth (so You Don’t)
In this episode of The Money Podcast, Rob talks about the ways in which overspending is tied to emotion, and that while we all logically know the best way to manage money is to never spend more than you earn, it’s almost too easy to let your emotions erode your hard-earned wealth. Rob explains that spending money out of a sense of boredom, shame or envy can quickly grow out of control until you’re in debt from spending money you don’t have on things you don’t need.
Key Takeaways:
Most people understand that the easiest way to manage your money is to never spend more than you earn, but emotions get in the way of this logic and can be one of the many things that can erode your wealth. Som unexpected ones include:
- Boredom. People will spend money for no other reason than they’re bored and have nothing else to do but spend money to occupy themselves. Find a better way to keep yourself busy or otherwise do not allow yourself to spend money when bored.
- Envy. You compare yourself to other people and feel envious of them and so you buy the expensive things that they have so you can feel elevated. While there’s nothing wrong with buying nice things, you should only do it if it’s something YOU want, not because someone else that you want to be compared to has it, and more importantly, if you can afford to buy it.
- Guilt. Many people would rather try to throw money at something they feel bad about or buy their way out of guilty feelings instead of trying to process why they feel guilty or what they feel guilty about in the first place. So instead of dealing with their feelings, they end up overspending and still feeling guilty.
- Shame. People will spend incredible amounts of money to compensate for feelings of shame or insecurity, especially about their looks, buying expensive clothing or plastic surgery. Again, this doesn’t help address the feelings behind why you’re spending the money, and spending money to make yourself feel better can become an addiction if you’re not careful.
- Ego. People’s ego and their desire to win at all costs or to at least defeat others through means like costly legal battles or spending lots of money on PR can pile up and run you into debt as you throw good money after bad to try to cover a loss.
- Turning wants into needs. Convincing yourself that you need something when actually you just want it really badly is a surefire way to lose control of your budget and spiral into overspending.
Practical advice against this: Actually be aware of how much you’re spending. So many people think they’re spending about half of what they actually are, so know what you’re spending, have a clear budget, don’t go over it.
Best Moments:
“If you think about money management logically, it’s very easy: Never spend more than you earn. Full stop.”
“These online shopping portals must make loads of money from bored people!”
“Some of these things, giving money away, they’re not necessarily bad as long as it’s money that is productive and money that you can afford to lose.”
“Do you know how much you’re spending every month? Do you have a clear budget? Do you make sure you never go over it at all costs?”
“If we manage our money better, then most areas of our life become better.”
Valuable Resources:
The Disruptive Entrepreneur Podcast - https://itunes.apple.com/gb/podcast/the-disruptive-entrepreneur/id1076679649?mt=2
Money: Know More, Make More, Give More -
About the Host:
Rob Moore is the host of the UK’s no. 1 business podcast “The Disruptive Entrepreneur,” as well as an entrepreneur, property investor, property educator, and holder of 3 world records for public speaking. He is also the author of 9 business books, 5 UK bestsellers, and the global bestseller, Life Leverage.
“If you don't risk anything, you risk everything”
Contact Rob:
Facebook - https://www.facebook.com/robmooreprogressive/?ref=br_rs
LinkedIn - https://uk.linkedin.com/in/robmoore1979