As a doctor, you’re well versed in reading a patient’s symptoms, making a diagnosis, and creating a treatment plan. You can apply this same mental framework to reviewing your personal finances, looking at money symptoms. To do so accurately, however, is going to take a high level of objectivity and self-awareness.
Generally, people (doctors included) tend to exhibit three major money symptoms. These symptoms exist on a continuum. No person tends to exhibit one all the time. However, people tend to have a proclivity toward one. Once you identify your money symptoms, you can begin your money treatment.
You’ll know a money bleeder not by the trail of blood left behind, but the trappings of luxury goods, lavish vacations, and multiple homes. Money bleeders lose money like blood from a severed carotid. Generally, bleeders see a bump in spending not as an opportunity to achieve financial stability, but simply more buying power.
Many bleeders have never been on a budget and they wouldn’t know how to create one. They tend to make many impulse purchases, too, driving up their debt load. The drawbacks of being a bleeder are apparent, but there’s at least one upshot: With what little financial life they might have left, a bleeder is going to live it up. Bleeders tend to know how to live large and have a good time.
Frequently, money bleeders were raised in extremely frugal households. They receive their first taste of cash, and they want to give themselves (and possibly their children) everything they were denied. While the instant gratification can be great, it also leaves you one job loss, illness, or unexpected life event (like a pregnancy, or a lawsuit) away from financial ruin.
Rx for money bleeders
If you want to save a money bleeder, you need to apply a financial tourniquet. That means going on a budget. If you’re not the budgeting type, then perhaps having the accountability of a financial advisor will get your spending in check. Some other possible fixes:
- Give yourself a weekly cash allowance. When that’s gone, you’re done spending for the week.
- Remove your credit cards from your wallet and smartphone, making impulse buys more difficult.
- If you want something, make yourself wait 24 hours before buying. The cool-down period before the purchase will help you determine if you really want the item.
Let’s be honest, from a financial standpoint, most Americans should probably save more money. However, over-saving creates its own set of psychological and logistical problems. That’s when people become financially obstructed.