Living paycheck to paycheck is extremely common nowadays. But, did you know that this trend occurs in families regardless of how much money they make? Even after a substantial pay increase, somehow we still find a way to use it all up.
At the time, it feels like there's nothing we can really do without, even though weeks before, while making less money, we were managing just fine! I am going to share with you one of the main reasons why this happens, and show you how you can stop living paycheck to paycheck.
There is a simple truth that underlies much of our financial problems: we want that which is hard to get. Let's consider an analogy: dating. When it comes to dating, women have used this principle for a long time. This is how the saying, “playing hard to get,” came about. And although this tactic may be questionable, it is true that men are typically more interested in women who require at least some effort to obtain.
Exactly the same principle applies to spending money. No matter how much we make (except perhaps the top 1%) there is always something that is just beyond our grasp. Something that we wish we had, but we don’t have quite enough money to afford it. Whenever a product, such as a house or a car, is just beyond our reach, it appears better than it really is. We strongly desire what is hard for us to afford, in large part because it is hard to get.
Look around inside your house, or perhaps at your house or in your garage. Do you have any expensive electronics that you never use? Or maybe overpriced skincare products that hardly ever make it out of the cupboard? Unfortunately, the most common overpriced items, like a car or a house, continue to drain just about all of our income well after the allure of the “hard to get” item has worn off.
But there is yet another factor working against us: it’s what psychologists call “assimilation.” Assimilation is the tendency to get used to things shortly after acquiring them. This is why we don’t come home every night ooing and awing at how beautiful our house is, regardless of how incredible it seemed when we first put in the offer. Actually, most of us get so used to everything we have that we hardly notice it at all. This only makes the tendency to want what is hard to get that much more dangerous. It makes no sense to bleed most of our monthly income into a great looking house or car, only to have our excitement for it wear off well before our debt is paid.
Next time you are about to find yourself wanting to buy something that you find difficult to afford, try the following simple steps:
- Pretend that you can afford it.
Too often we base the quality of a product based on its price and label. Plus, as we already discussed, if it's difficult for us to afford it, we may want it all the more because of the inherent allure of that which is hard to get. By ignoring the price, you automatically protect yourself from the "hard-to-get" factor, and can begin to think more objectively.
- List the advantages of buying.
Now that you are no longer under the spell of wanting it just because it is hard to get, you can begin to think objectively about whether you want this. Sometimes, you may find it difficult to find any good reason to buy the item once you ignore the price. For example, I stopped buying expensive makeup when I realized that I can't think of a single advantage it has, other than that it should be better because of its price and brand. But at other times, some advantages remain.
- List the disadvantages of buying.
This is very important and it's not something that many of us are used to doing. If you are about to buy an expensive house, after you eliminate the "hard to get" factor and list the advantages, considering what are some of the drawbacks of the purchase. It may too far from your place of work. There may be a lot of construction in the area. It may be a lot larger, and so it takes a lot longer to clean. The same idea applies to any other purchase. Everything we buy, or really anything at all, carries both pros and cons. By considering both, you make it much more likely that you'll make an informed choice.
- Decide if it’s worth the price.
After you ignored the price so as to bypass the "hard-to-get" factor, and calmly analyze both the advantages and disadvantages of the purchase, it is time to decide whether it is worth the price. You need to consider how the financial cut will affect the rest of your life. This is especially important for very large purchases. Returning to the house example, if you buy this house, will have money to afford furniture? Going on vacations? Will you still be able to go out to dinner whenever you feel like it? If you stop to ask yourself if it’s worth it, then the few times that it does make sense to make a substantial financial sacrifice, at least you know that you are making an informed choice. But you may find that most of the time, going outside your comfortable price range is simply not worth it.
|Written on 5/29/2012 by Maya Ackerman. Maya divides her time between research, writing, teaching, singing, and spending time with her family. She has authored over a dozen academic articles and is about to receive her PhD. To share her insights and bring you researched articles on topics such as money, success, happiness, and love, she co-founded Great Living Now, a personal development community focused on helping others make their lives better.|
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