Dr. GoodCents: Financial Self-Images

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financial self image

financial self imageA clinical psychologist with nearly 30 years of experience, Dr. Shapiro is ready to answer questions, offer advice and share strategies to help you alleviate the mental stresses of money management. Send your question to GoodCentsDr@gmail.com and it may be answered in an upcoming column!

Financial behavior is entwined with self-image in a number of ways. Making purchases is not only about having things–it is also about being the kind of person who has those things. As a result, changing our patterns of spending and saving may involve changing some aspects of our financial self-image.

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Self-images are closely related to images of others; it’s about what choices and behaviors we view as positive or negative, for both self and others. So let’s take a look at different images of thrift versus big spending and luxury consuming.

Contrasting Financial Images

People are all over the place on this. To some, thrift looks good, and their image of a frugal individual is an admirable, contented person. To others, thrift looks bad, and their image of frugality is an unfortunate, pitiable person whom they would never want to be. By the same token, some people see big spenders as successful people who appreciate the finer things in life, while others view lots of luxury consuming as a reflection of superficial values and self-indulegence. And some people have mixed images of both financial styles, seeing advantages and disadvantages of each.

The following lists of words paint pictures of these two prototypes. You can learn about your images of different financial styles by deciding which of these words describe how you view thrift versus free spending.

Do you perceive the following good qualities in people who spend lots of money on material things?

Positive Qualities Associated with Free Spending

  • Successful
  • A winner
  • Enjoys life
  • Luxurious
  • Elite
  • Confident
  • No limits
  • Nothing but the best

Here are some positive meanings sometimes associated with a thrifty lifestyle; are these the qualities that come to mind when you think of thrift?

Positive Qualities Associated with Thrift

  • Careful
  • Practical
  • Disciplined
  • Future
  • Unmaterialistic
  • Down to earth
  • Unpretentious
  • Good values

Some people have negative views of big spenders who buy lots of luxury goods. Which of the following words describe your evaluation of this type of lifestyle?

Negative Qualities Associated with Free Spending

  • Greedy
  • Glitzy
  • Materialistic
  • Wasteful
  • Pretentious
  • Superficial
  • Showy
  • Spoiled

Finally, there are negative meanings and qualities sometimes associated with thrift. Which of the following words describe your image of frugality?

Negative Qualities and Meanings Associated with Thrift

  • Miserly
  • Cheap
  • Poor
  • A loser
  • A failure
  • Low class

Images Drive Our Behavior

If you are willing to do some new thinking about money and material things, one good place to start would be reconsidering what you consider admirable and desirable about thrift versus free spending. This reconsideration can involve a combination of logical thinking and imaginative visualization—in other words, changing what you believe about thrifty versus free-spending individuals and changing the way you picture these two types of people.

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Two of the words on those lists have particular potential to interfere with our efforts to achieve good financial self-control. People who associate “success” with big spending and “failure” with thrift are going to feel uncomfortable and unhappy if they try to reduce their spending. Holding positive images of luxury consuming and negative images of thrift make it difficult and painful for people to economize because doing so damages their self-esteem. People in this position might know they really need the money they are saving, but that doesn’t alter the fact that passing up desired purchases makes them feel like a loser. And no one wants to feel like a loser, even a loser with a good personal balance sheet.

Be Frugal Like a Millionaire

If you have negative images of thrift like these, you might want to reconsider them in light of some research reviewed by Tom Stanley and William Danko in their book, The Millionaire Next Door: Surprising Secrets of America’s Wealthy. The main “secret” is summarized by the name of Chapter 2: “Frugal Frugal Frugal.” Stanley and Danko’s research debunks common myths about high net-worth individuals by finding, for example, that the typical millionaire:

  • Did not inherit significant money.
  • Works more than 50 hours per week.
  • Has lived for more than 20 years in the same home, with neighbors who are not millionaires.
  • Drives an ordinary car that is several years old.
  • Buys jeans at Wal-Mart.

Most millionaires accumulated their wealth by living below their means and foregoing purchases of expensive clothing, jewelry, and other status symbols. What did they buy instead? Financial security and independence. If you can reconfigure your images of spending and saving along the same lines, you will be on your way toward achieving the same goals.