David Krueger, a financier in Houston, Texas, reveals that most people are using the money to show their social status. “Many people who do this are not as financially well off as they pretend to be. Being perceived as wealthy shows independence and therefore power – evidence that money also provides opportunities” – However, this can sometimes lead to:
The Credit card trap – It can be so easy to pay for meals and goods with your credit card(s) – and gives the impression to others that this is a manageable system for you, and you may have the momentary satisfaction of being perceived as financially free, and you may feel good that you have a lot of funding sources through your card, a high limit – but remember that this convenience still must be paid back, often at a much higher interest rate. Short term gain but long term debt, the credit card trap.
Monitor your spending. Keep a note of your daily spending. Perhaps you spend more when stressed, sad, worried – maybe when you are happy, and feel you deserve a treat – fine, as long as you need whatever you are buying.
It is therefore very important to observe your response when you’re doing something that is not consistent with your financial goals. If you observe your emotional triggers, the less likely you will actually spend money you do not have.