#25 Money Mindset: Decoding Dollars - Embrace Emotional Spending and Master Logical Spending

Are you driven by impulse or meticulous planning when it comes to your finances? Discover key traits of emotional and logical buyers and learn actionable tips to cultivate a healthier money mindset. From creating budgets to embracing flexibility, this episode empowers you to navigate your financial choices with confidence and purpose. Tune in for a thought-provoking discussion that aims to enhance your relationship with money.

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Today we're diving into a crucial aspect of personal finance – understanding whether you're driven by emotions or logic when making purchasing decisions. In a recent podcast, I delved into the fascinating realms of emotional and logical buying, and I'm thrilled to share the key takeaways with you here.

Section 1: Setting the Stage

In the fast-paced world of Black Friday deals and impulsive purchases, it's essential to recognize our buying patterns. Are we the emotional buyer, swayed by feelings and brand loyalty, or the logical buyer, carefully weighing risks and considering the long term?

Section 2: Emotional Buyers Unveiled

1. Understanding Emotional Buying: Emotional buyers thrive on impulse purchases, driven by brand loyalty and a desire for instant gratification.

2. Unpacking Motivations: Emotional spending may stem from a need for significance or variety. It's crucial to delve into the motivations behind these actions for a healthier money mindset.

Section 3: Logical Buyers Explored

1. Decoding Logical Buying: Logical buyers base decisions on rationality, often displaying risk aversion and a focus on long-term outcomes.

2. The Risk of Rigidity: While logical buyers excel in planning, excessive rigidity may lead to missed opportunities, especially during events like Black Friday.

Section 4: Strategies for Emotional Buyers

1. Create a Budget: Designate specific funds for impulse spending within your budget, fostering financial flexibility.

2. Education and Awareness: Elevate your financial literacy to make informed decisions, understanding your priorities and distinguishing between wants and needs.

3. Practice Delayed Gratification: Cultivate patience in spending, recognizing that instant satisfaction may not align with long-term financial goals.

Section 5: Tips for Logical Buyers

1. Embrace Flexibility: Learn to adjust plans as needed, avoiding the pitfalls of rigid financial structures.

2. Allow for Splurges: Grant yourself permission to indulge occasionally, ensuring a healthy relationship with money.

3. Explore Healthy Risks: Consider expanding income streams or investing wisely, allowing for financial growth without stifling creativity.

Whether you find yourself in the emotional or logical buyer camp, the key is self-awareness and intentional action. Take a moment to reflect on your money mindset, identify areas for improvement, and implement practical tips for a more balanced financial life. I'm eager to hear your thoughts – drop a comment, tag me on social media, or share your insights in podcast reviews. Here's to mastering your money mindset and achieving lasting financial peace!

Transcription:

00:00

Do you buy based on emotion or are you a logical researcher? I am really excited to dig into this separately. I talked about this a bit on a separate podcast around Black Friday, but I wanted to have a separate space that you can come back and refer back to this and dig into this more. And I have a worksheet that goes along with this for free. So make sure you check the show notes to get that free worksheet because this is going to really help you and is one of the foundation pieces

00:30

to really helping you dig into your money mindset and developing healthy patterns and healthy mindsets around your finances so that you can have more peace and joy in your life. Because that's what this is about. We're not just sitting here talking about money mindset for the fun of it. I mean, I enjoy it because I love seeing the freedom that it gives people, but you're probably not in that place yet. You're like, well, something needs to shift, or I don't know, does something need to shift? And so along with creating awareness,

00:59

giving you the tangible tools to actually help you shift those pieces. So then then we can talk about the tactical pieces of actually how to manage your finances and steward your money. Well, so let's talk emotional buyer versus logical buyer. I'm going to run through these. If you didn't listen to the episode on black Friday or if you, I mean, we forget things, so I'm just going to go through it again. So an emotional buyer is driven by emotions.

01:27

They often make impulse purchases and they usually have a high level of brand loyalty. So they know their brand names and or whatever brand they buy. That's they're very loyal to that. None of these are bad things. It's just learning how we operate, having the awareness of how we operate so that we can go, okay, does this serve us? Is this serving me or do I get to shift this in a way? Now a logical buyer is rational based decision making.

01:56

They're often risk adverse and they take into consideration like the long term. And so looking at this, like they look at things from that long term perspective. You know, can they they're not necessarily as tied to the brands, but they're looking at quality, price, quantity, those pieces. What's what's worth it? But they oftentimes. And I actually fall into this camp will opt out of.

02:24

everything or kind of like they're very risk adverse and so even with like Black Friday shopping like I was talking about oftentimes they either have their list and they you know check it twice or they opt out of Black Friday altogether and they like block out and they don't even consider that maybe it's something that is a need and is a priority and it's a really great deal and that they actually should or could be saying yes to and saving themselves money and stewarding that well. So

02:53

That's the logical versus emotional buyer. Now, when it comes to, okay, so there's, emotional buyers are often in that impulse spending, they buy the things and being able to look at what the reasoning is behind those pieces. Now, for emotional buyers, I would say oftentimes, they might be seeking significance in a way, or they're seeking variety,

03:23

you know, they're maybe they're buffering with their spending. There could be all sorts of different like what's going on behind the scenes and in terms of their motivations. And it's really important to dig into that from a money mindset piece. Like what's actually going on here and asking yourself like what's really going on and the same for logical buyers. You know, as somebody who's a logical buyer, holding on and like coming at it from a place of scarcity and being risk adverse and but very, very much being able to say like

03:53

Nope, I'm claiming 110% certainty. I know exactly where every penny is going down to the cent. We're not straying from the budget. I am, you know, there is, you know, exactly. This is the plan that we're following. We are not deviating, even if it is an incredible deal that I should be taking advantage of. But that deviates from the plan, and we're not doing that and like and shutting that out. And what are you gaining from that? Are you gaining certainty? Again, are you gaining significance from that? Like you.

04:22

like you gain significance by staying on track and by not spending money, that scarcity piece and holding on as tightly as possible because you're looking for those pieces, it really depends on what that motivation is. So digging into that and asking yourself, what's really going on here? Why is this important to me?

04:46

or why is this not important to me is really key. So then once we know that, then we can look at shifting some of those things to a healthy mindset, right? So for emotional buyers, some of the tips that I have for you would be to create a budget and to look at, okay, what, and to be able to have...

05:16

You set a budget for yourself of, okay, this is the money I have coming in, and this is the money that I have that I can impulse spend with. And this money over here, first of all, this money goes to bills, and then there's this money that I can do some impulse spending with. And how much is that? What does that look like? Because you can have the freedom and the flexibility to still be an impulse spender, but keeping it.

05:42

so that you're not ending up in debt and adding stress and maxed out credit cards and all of those things. Also educating yourself just around finances and what that looks like and asking yourself some really good questions. And this kind of goes into the next one of what are your priorities and what is a priority? And being able to impulse spend.

06:10

might be something that's a priority for you because it fills a need. Now, again, digging into those needs and what's actually going on there is gonna be really, really key for you. But then asking yourself, what do you want most? And maybe it's just something that you enjoy being able to go to the mall on the weekend and you're not looking for specific things, but if there's things that you like, you like being able to just purchase them and do that impulse spending. And that's okay, that's not a bad thing. When you set yourself up for success with that,

06:40

Because if at the end of the day you come back and you keep shame and guilt and judgment on your head of well I shouldn't have bought that, I can't return it, or like you have that buyer's, you know you have that buyer's remorse, you want to return it, maybe you do return it. You can end up in some really unhealthy patterns or you purchase that item but then you have kind of the shame and guilt around actually using the item that you purchased. And utilizing it because you're like well I can't break it, I spent a lot of money on it and like I shouldn't have bought it anyways.

07:09

and then you put it in your closet to keep it safe so it doesn't get wrecked, that doesn't serve you, right? And then asking yourself, what do you want most? And this is, like I said, with the priorities, different seasons, our priorities are always shifting and changing and adjusting and being okay with that. And that's really important to be able to look at, okay, what's a priority right now? Do I have the room for this?

07:39

Have I set myself up for success? And also, what do I want most? Like, you might really want that item and you might really love it, but is that worth sacrificing the piece in your finances when you look at paying your credit card bill or having to have a conversation with your spouse about where the money went for the month or where that extra money went, those pieces? And the next piece to this,

08:08

The next tip I have is practicing delayed gratification. This is something we all get to do more of in every aspect of our lives. Because just like going to the gym once isn't going to get you a six pack of abs, or eating one salad, or taking supplements for one month isn't going to suddenly make you like this superstar feeling like a million bucks.

08:35

Delayed gratification is so, so important in all areas. I think in relationships, in our finances, in our careers, in our education, all of the areas, health. Next up is have an emergency fund. Now, I talk about emergency fund in terms of like budgeting and on like a needs and like an emergency fund. Maybe I should call this more of a reserve fund.

09:05

And that's having some money set aside for when an impulse purchase comes up that you already have some money set aside for those impulse purchases. Or for, you know, if something is more than. And so your actual emergency fund is separate. This isn't to pay for emergencies. You're not dipping it, dipping into your emergency fund for impulse purchases. But having like that backup fund of like every month you budget, okay, this is like, you know, maybe my impulse or my fun money or my entertainment money, my shopping money, whatever that is.

09:35

but then you kind of have a separate like reserve fund that you put a little bit into every month. And so then if something is over budget, you can take from that and put it towards that item or whatever you're doing and you have that money there. And it kind of also acts as a buffer so that you're not dipping into your savings or even considering looking at your emergency fund. Set yourself up for success. And then the last one, as an emotional spender and is tracking your spending.

10:04

So it's one thing to set up a budget and that's like your forecast. I think I've talked about that. I definitely talk about it in my courses. Forecasting out where your money's gonna go and that's what a budget is. But then actually tracking your spending to know where did my money go? And especially if you're dealing with maybe, you know, some credit card debt or, you know, things are tight for you. You know, there's not, you know, there's not as much buffer space as you'd like in your finances right now.

10:31

tracking where your money is going and what you actually spent in different areas is so important. It's just as important, if not more important, than budgeting. Okay, so that's for my emotional spenders. Now, my logical spenders can also take a lot from those pieces, but for logical spenders, some tips are leaning into being more flexible and being willing to, like, just because you have a plan.

10:55

Again, this comes back to what are your motivations behind it, right? And if you're like, well, I'm just craving certainty and I need to know exactly where it's going and we cannot deviate because like, that's not okay. And I'm not, you know, like that sends you into like panic and overwhelm mode. Take into that, ask yourself some good questions, get a good coach, do some work around that. But learning how to be more flexible with, okay, so what can we adjust here?

11:23

This came up this month, this opportunity came up. This is a really great opportunity, after thinking about it and working through the numbers and those pieces. I wanna move forward with that. So what are we going to adjust? And that's one of, and that kind of is one of the tips as well as adjusting and being realistic with your financial goals, right? Things are going to come up, things are going to shift. And so not feeling like you're failing just because your plan shifted or changed a little bit.

11:53

is really key. Allow yourself to have some splurges. It's okay when you're being stewarding your finance as well to when you see something, whether it's a Black Friday sale or outside of that, an opportunity comes up, allow yourself to have that splurge. And if you've set yourself up for success, you have that buffer space, maybe you have that reserve fund, or you budgeted that in to have that flexibility.

12:23

Whatever that is.

12:26

and get to take time to enjoy. Because if you're so focused and like obsessed with staying on the plan and staying on budget and your finances and money, and it's like, you're obsessed over it and it's overwhelming and it's consuming you, that's not healthy either. Money is a tool that we get to use and utilize and we get to tell it where to go. We're the bosses of it. It's not the boss of us. So stewarding it well,

12:56

And then, and also looking at ways that...

13:01

In healthy ways, how can you maybe take some more risks? Where can you look for healthy ways that you can, whether it's expanding your income, or investing in things, or whatever that is, that you can take healthy risks and not being so set to just like holding onto it and like never ever stepping out of that box. Like don't just sit in that and play small in that box.

13:31

Learning how to steward it well and expand is so, so life-giving and so good. And you can do so many things with it. All right, so those are the tips I have around for a logical buyer as well. So I'd love to hear your feedback. Which camp are you in? Tell me wherever, you know, drop it wherever, tag me on social, or you know.

13:57

I think you can review or leave a comment on the podcast as well, especially if you're on Apple, but on Spotify or other places as well. And definitely on YouTube if you're watching this and I can't wait to hear what camp do you fall into? What tip are you going to work on first? Where are you? What do you maybe get to reprioritize? What do you get to, you know, where do you allow for some more flexibility or, you know, where do you get to practice delayed graphic gratification? Are you going to set up that reserve fund?

14:26

even if it's like 20 bucks, right? Just setting that up. So I can't wait to hear. I hope this has been helpful. See you soon.