A reader recently asked, “How do I figure out my financial priorities?” That got me thinking about 2019. For me, 2019 holds culinary school tuition payments; deciding where to live in Portland, Ore.; the process of buying a condo; a vacation to a sunny destination in the winter; and many more decisions.
Next year may look vastly different for you, but the truth is, our financial years are similar because at the root of it all, money can only be spent, saved and given away.
Spending: We spend money to purchase items, big and small, that we want, or we spend to pay for things we bought in the past – paying off debt. Saving: We accumulate money to spend or give in the future.Giving: We share the money we have to help someone we care about or support a cause that’s important to us.The psychology behind each of these choices is:
Control: According to a study in the Journal of Consumer Psychology, spending gives us a sense of control. Both debt and sadness can cause us to feel out of control. We seek to take control back through shopping and paying off our debt.Avoiding pain: Research published in the Journal of Consumer Research shows that people who find saving to be comfortable find spending to be emotionally painful. Credit cards de-couple the emotional high of spending from the pain of paying.Feeling good: David J. Linden wrote in a Psychology Today article what you probably already know: “giving feels good.” Whether it’s from doing good, the warm glow from deciding to help another or the status gained from charitable giving, we give to improve how we view ourselves.Each of these choices is about seeking pleasure or avoiding pain. By simplifying our concept of money and what it can do for us, we can focus on this question: What is the one big thing you want to accomplish or feel?
Grab your journal. If you don’t have one, start one for 2019. It can be as simple as a $1 notebook. For visual learners, your journaling can take the form of a collage or dream board. However you choose to connect to the deepest parts of yourself is perfect.
I recommend pouring your favorite drink in a quiet place where you can explore your thoughts, feelings, reactions and answer to the question: What is the one big thing you want to accomplish or feel?
When you have your answer, consider this question: What are you going to have to do more or less to accomplish your goal?
In the next column, we’ll look at building habits to help you accomplish your goal.
Former Durango resident and personal finance coach Matt Kelly owns Momentum: Personal Finance. www.personalfinancecoaching.com.
