Is Your Ego in Charge of Your Wallet?

Will Rogers, the great American folk humorist, once said, “Too many people spend money they have not earned, to buy things they do not want, to impress people they don’t even like.” Sad, but true.

Last fall, as I walked our neighborhood bedecked in all sorts of plastic-blow-up-holiday decor, I couldn’t help but wonder if my neighbors knew there was a pretty serious recession going on. I mean, if they had money for a 10 foot snowman, surely they should have money to save for retirement. But wait, that’s not nearly as much fun, we don’t show off our 401(k) statements to our neighbors (we’d be dubbed “Those weird folks”).

So this got me thinking about how many of our financial decisions are not made with our hearts or heads, but, rather, with our egos. Excessive spending is a serious financial problem that can stem from many sources, including a desire to impress people. Status symbols can serve as financial goal posts but, after a week or so, their thrill – and the attention they may provide us – fades. What remains is the object itself, possibly debt, and a ticket to get back on the “I need the respect of others” train.

This isn’t healthy.

I have worked with mental health counselors to help understand these issues in the hope that I will be better prepared to advise clients who are struggling with debt, and subsequently have little or no money to save towards their goals. Unfortunately, all the financial advice in the world won’t change your financial situation unless and until you know yourself, know what your purpose is, where your obligations lie, what you’re trying to achieve and most importantly….why. When you’re able to focus on the picture you want your life to look like, your trusted advisor can help you paint it.