Mind Over Money

Get rid of your old habits to make for a healthier relationship with money

Most of the time, a purchase is not about necessity. "The number-one money script in our culture is "More money or things are going to make me happier,"" says Dr. Klontz. "It's just not true. We have decades of research showing this."

Reigning in your spending and taking control of your financial health isn?t about punishing yourself or going without. "'Budget' isn't a bad word," says Dr. Klontz. It's not about saving money for no reasonit's about figuring out what you really want. "The only way to do that," he says, "is to get honest and make sure your spending is in line with your values and your goals."

Connect with Your Cash
One of the best ways to control your spending is to use cash instead of plastic. The form of money you use influences how much you spend, according to “Monopoly Money,” an article in the Journal of Experimental Psychology: Applied. When study participants used credit cards, they couldn’t recall how much they spent, so they kept spending.

“People just don’t seem to have an emotional reaction to spending when they use a form of money that doesn’t smell, look and feel like money,” says Priya Raghubir, Ph.D., a professor of marketing at New York University and an author of the study.

So consider switching to cash. When you pay for something in cash, there is an immediate review of what you are getting for what you are giving up, says Dr. Raghubir. When you use plastic, the visceral feeling of parting with your money is delayed, and you can enjoy immediate gratification without immediate consequences.

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