The economic psychology of budget balance spending 📈

Andrei Tapalaga ✒️
The economic psychology of budget balance spending 📈

We have all forgotten to think in our own unique ways as our minds are being evolved by the trends that are controlling today’s society. A good example would be the way that a business would use marketing techniques to attract the customer to purchase a certain brand from the shelf rather than the one next to it. Marketing also goes into a psychological plan by utilising the right price, at the right time, in the right geographical location. We are looking at a scale that must balance, every day that we make decisions we try to put weight right or left on a scale. Based on the outcome may be another decision must be made to re-balance the scale, this may be seen as a type of “exception” for something to replace what is missing, what has been lost or what has not been gained in the plan.

Perception is also very important. We must take into account that most people have different views and the way in which they view life itself can differ very much from person to person. This also proves that point of view which I am presenting in this article and this may not be the only one that has not been analysed in detail. There may be different ways that people are budgeting and spending at the same time. However, we can prove that the majority of the population falls into the 3 categories.

From a psychological point of view, most people see the necessity for some sort of reward from every action made. Making yourself a meal will grant you the pleasure of serving something made by yourself as well as maybe the pleasure of knowing you saved some money from making it yourself rather than having takeout. Doing your homework will grant you free time as well as the sense of achievement and thrive for a goal. This brings me to the job that we do in exchange for financial rewards. Are they really rewards if we require a financial muscle to pay the rent, bills and leaving necessities? What I am trying to portray is that the mindset you use to do things with will not only help you feel more pleased about spending but also raise the efficiency of the work and your performance.

This brings me to my next point which is the credit. Most people do not have much of a choice as they desire more and because of the financial position that they are sitting in the only way to gain more is through credit. Now the question to ask here in relevance to this is, does spending on credit affect the way we budget? Knowing that the money you are spending is not yours and will have to be given back to at some point alongside a commission. Time is a big factor in this case as some people desire things then and there. You could wait 2 weeks until you are paid and purchase that new phone that you been dreaming about or you can go on overdraft to get it now. It is just like purchasing something online and paying extra to have it delivered by tomorrow rather than 2 days later. The conclusion comes to the efficiency of spending thrown out the window. However, the extra being paid to get something right now can please the psychological desire of not having to wait.

It is not easy to save a decent sum of money. Many variables can affect this process but the main would be the financial cash flow that your account presents. You need to ask yourself a few questions to determine the “real” need of a certain product. Does your income permit you to purchase something of a higher quality or are you required to drop the quality of certain products? How will the quality of the product affect you apart from a financial point of view? Will the lower quality produce affect your health, state of mind or overall satisfaction?

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