Thursday, April 30, 2009

I Don't Get It

Someone please help me understand the psychology of money. Please help me understand why some people (those who "know" better) use credit to purchase things they could have paid for with cash - when I say credit, I don't mean use credit and pay it in full when it's due, I mean use credit and make payments? Please help me understand how paying 18% or more a month in interest payments while earning less than 3% of interest in a savings account makes sense. And while you're enlightening me on that, please don't forget to share with me how purchasing nonessential depreciating items on credit makes sense when you have other outstanding debt - i.e, balances on credit cards that you cannot account for. Yes, I need a tutorial, I need some understanding.

Now before anyone thinks that I'm being snooty or "forgetting" where I came from, please understand that I have done almost every dumb thing you can do with money. I've gone into debt for some of the most ridiculous reasons ... BUT ... that was before I had any knowledge or understanding about money. Once I learned how to handle my finances, I didn't look back, not once. I continued to make mistakes until I learned - with each book I read, each CD I listed to, each website I perused, I made better decisions. So no, I'm not talking about those who honestly may not know better, I'm talking about those who can talk personal finance with the best of them. I'm talking about those who openly profess and proclaim their pursuit towards financial independence one minute but then justify their ridiculous spending with one made up excuse after another the next minute. News flash, you can always conjure up a reason to spend, that's not hard. Heck, 15 reasons just ran through my mind for spending some of my savings.

It seems as if frugality is the latest vogue; it's a movement, it's in, it's hot, it's even sexy. I guess everyone wants to be in but not everyone wants to pay the price. If you're not ready to pay the price, then don't pretend, just be honest, if not with others, then at least be honest with yourself - that's what matters most.

One day soon I'm going to write about the inspiration for this post, but before I do, I want to know if I'm missing something - so someone please help!


DogAteMyFinances said...

I can answer this in one word. Cars.

Shtinkykat said...

It's the psychology of Wimpy: I will gladly pay you next Tuesday for a Cheeseburger today. (For those who are too young, this is a Popeye reference.)

~Truly Tina~ said...

Oh wow, Wimpy...I remember that character! I ditto DogAteMyFinances and Shtinkykat (desiring things now without having to feel the cash leaving your checking account now). My question is why are so many people consumed with things? Is it for show? Is it for feelings of self-worth? What?

Dare To Be Domestic said...

Lots has to do with technology. We live in a time where people get what they want when they "think" they need it. Its all about debit, online banking, east credit - money moving real fast.

I've been trying to use cash only it works and I've haven't bounced a check or accrued credit interest in a long time. But I must admit I've been getting carried away with itunes. It just too easy.

Ms. MoneyChat said...

Dog - isn't that a old standby excuse.

Shtinky - right, let me give you next year's paycheck for this television today. oh ludicrous.

Tina - i think both. crazy.

DTBD - now that's awesome! no interest accrued in a long time, magnificant job! i feel you on the itunes. i'm the same way but i purchase from amazon.