How Your Brain Sabotages Your Financial Freedom: A Life-Changing Guide to Debt Relief

We can't be the only ones who've noticed the recent trend in personal finance content of money experts berating guests who struggle with debt and poor spending habits. While the clickbait content can make for great guilty pleasure viewing, we have our doubts about how much it benefits the viewing audience, let alone the guest in the hot seat. While it's easy to think that people struggling under the weight of debt ended up in their situation due to pure irresponsibility, there are usually deeper issues at play when someone is struggling with chronic debt and overspending. Indeed, the psychology of debt plays a huge role in people's financial mental health.

Unlearning bad money mentality

While it might feel like your attitude towards debt and money is something you developed once you moved out on your own and entered the workforce, it's more likely that your money mindset took shape long before you ever got your first bank account. When you were growing up, did you frequently hear your parents stress about not having enough money? This could lead you to develop a scarcity mindset. Conversely, if your parents were spendthrifts, you might have never learned how to be frugal.

While you don't have to resent your parents or your upbringing for your poor spending habits, it can be useful to self-reflect and determine what childhood experiences may have contributed to the way you view money and debt. Take some time to jot down how you remember money being discussed when you were a kid. This can be a useful exercise in unpacking some of your bad habits when it comes to debt and spending.

Recognizing your limiting beliefs about money

In psychology, a limiting belief is an idea you have about yourself that holds you back from achieving your personal best. For example, a person who struggles with public speaking may sabotage themselves by believing that they're going to screw up before they've even stepped up to the podium.

You might have some limiting beliefs about debt without even realizing it. When you spend money that you don't have, do you believe deep down that struggling with debt is just a routine part of who you are? When you get a credit card bill, do you trust yourself to make a plan and stick to it in order to pay off the balance?

Most of us don't really take the time to confront our limiting beliefs. Take the time to self-reflect and examine the ideas you have about yourself when it comes to your debt. If you genuinely don't believe that you're capable of ever living debt-free or fixing bad spending habits, then you're setting yourself up to fail again and again.

Why bettering yourself is easier said than done

Maybe you don't feel like you're held back by negative childhood experiences or limiting beliefs, yet you still find yourself in a constant pattern of overspending and then struggling to crawl out of the hole. Sometimes we can easily recognize that our behaviors are harmful to our overall well-being, yet we feel like we're being held back by some invisible force from improving ourselves. This can create the negative relationship between debt and mental health.

Behavioral science tells us that we're creatures of habit, both good and bad. When we get locked into habits, we begin to rely on them because they're familiar and a part of our daily routines. If excessive shopping soothes you after a hard day, you come to rely on this coping mechanism to protect yourself from negative emotions.

Ultimately, freeing yourself of bad spending behaviors comes down to breaking these bad habits, which can take time. You need to find alternative ways to cheer yourself up and self-soothe that don't involve spending more than what you afford. For some people this is a self-improvement task that they can conquer on their own, while others might benefit from speaking to a mental health professional or support group.

Small steps to improve your money mindset

If you've been a problematic spender and have had frequent issues with managing your debt, change won't happen overnight. However, there are small steps you can take to start improving your behavior for the better.

Know Your Overspending Triggers - Familiarize yourself with the situations in which you feel compelled to spend excessively. Is it how you cope with stress? Do you spend more when you're trying to impress your friends? If you're aware of the situations in which you tend to overspend, you can know when to be on your guard.

Use Visual Guides To Track Debt Repayment - Let's face it, there's nothing that feels good about sending a payment to a credit card company. However, the Fruition Debt Paydown tool gives you a visual timeline to watch your debt total change (and hopefully decrease!) over time. Seeing a visual representation of the good work that you're doing can help you to stay motivated and focused on your financial goals.

Become a Mindful Spender - Before you make a purchase, take a breath and ask yourself if it's really worth your hard-earned money. We often fall into patterns where we spend mindlessly, such as ordering food on a takeout app without stopping to see what we have in the fridge. That little extra moment can be all it takes for you to realize that a purchase isn't worth it. In addition to pausing before you make a purchase, take a moment to think about how purchases make you feel after the fact. If that pair of shoes that you don't think you'll ever wear don't make you feel good after the fact, being mindful of that guilty feeling can help to prevent such frivolous purchases in the future.

We want to help

At Fruition, it's our goal to simplify and streamline your journey towards becoming debt-free and content with your money mindset. Our tools allow you to streamline your finances, in addition to providing access to real human beings who are here to help you along the way. Improving your money mindset takes time, but with the right toolset at your disposal and an understanding of the psychology of debt, change is possible.