Money & Emotions: How Women Take Back Control

Welcome back to the Wealth Wise Women Podcast! In this episode, we’re diving deep into the emotional and societal landscape of women and spending. Why are women more likely to overspend emotionally than men? How does capitalism fuel our financial behaviors? And most importantly, how can YOU regain control over your finances?

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Transcript

>> Wes Cuprill: 0:00

Hi there. I'm certified financial planner Wes Cuprill and this is Wealthwise Women, the show that's rewriting the narrative that personal finance and investing are just for men and just for insiders. Because whether or not the rest of my industry realizes it, the future of wealth in the United States is female. And I aim to foster that future one episode at a time. So join me as I attempt to add humor and entertainment to the otherwise snoozefest that is personal finance, addressing along the way, various topics from the lens of how they affect women in particular. And if you like what you hear, be sure to subscribe to our channel and our newsletter. The link to which you can find in the episode details. That being said, let's get to this week's episode. Hello there, and welcome to another episode of the Wealth Wise Women podcast. This week I want to talk about the emotional and societal landscape around spending. Specifically, I want to address the fact that, ladies, you face some greater pressure when it comes to spending than men do. And I want to discuss some strategies for managing your emotions if you find yourself in the habit of emotionally spending and give you some tips you can use to regain control of your finances. Now, I want to lead off by acknowledging that emotion is one of the greatest drivers behind capitalism. I mean, if you took emotion out of our financial decision making, the world would look vastly different than it does now. We'd drive pretty much the same car. There'd be small variations between sedan and truck. We'd all live in very similar houses. They'd probably just have enough rooms for however many people are in the individual family. And we'd have much less variety in our stores. You'd have one brand of razrs, you'd have one brand of shampoo. You wouldn't have these large supermarkets like we do now. And frankly, a lot of that sounds pretty awful. It sounds very, very bland and vanilla. And frankly, it sounds very communist, you know, consumerism in our ability to choose from such a large variety. It's not just an element of capitalism. It's an element of emotional identity. And I think that's absolutely crucial to having a world that is, you know, worth living in, that has a lot of great things going for it. However, unbridled spending fueled by emotion does have its own issues. It's at the other end of the spectrum, if you will. And it's an issue that actually is faced by, according to some studies, about half of Americans. And I'll get to more in a second about why I think that is grossly Understated. In one study that I was reading, about 49% of Americans say emotions have caused them to spend more than they can reasonably afford. Again, I think that number is crucially understated. For example, another study said that 69% of Americans admit to emotional spending pushing 39% into debt. So again, it all entirely depends on what study you're looking looking at here. Other numbers show that these studies don't even come close to giving us the full picture in terms of how emotion is causing a lot of overspending in this world. I mean, look at car debt. I think I just saw that it's over $1.6 trillion. It actually did go down slightly over the last quarter, but it has gone steadily upward over the last 10 years. Credit card debt has also reached an all time high recently. These numbers are in the trillions of dollars and a lot of it has driven by the fact that we all want new stuff. We want the biggest, we want the best. I talked about it the other week how we're often wired to just think about tomorrow. And in the short term, a lot of that is what leads us to say, okay, let's go ahead and get new stuff. But it's leading to unbridled spending that is driven by emotion, whatever that emotion might be. And it's causing a ballooning amount of debt. And I think over time it's going to lead to a lot more societal issues. Stress is one of the leading causes of emotional spending. And stress spending affects women more than men. In one study it said 34% of women say that stress caused them to overspend. Compared to 24% of men and ladies, you are more likely to engage in compensatory spending, meaning that you're using spending to compensate for something else. I'm not going to get into, into that topic deeper, but there's a lot behind why spending is used to compensate for something. Add in what's called the pink tax and ladies, you're facing a tougher world than men are. Now, the pink tax refers to the fact that women, you spend more for the same branded stuff. You spend on average about 4% more per unit. And when it comes to things specifically gendered towards women, razor blades would be a great example of this. You spend 15%. #ore so all of these things show that again the cards, I don't want to say they're intentionally stacked against you, but they are. And it just shows again that it isn't a, completely equal playing field. Ladies, you do face more Societal pressure, more emotional pressure, and then on top of that, things are more expensive for you. So at the end of the day, essentially emotion is what drives us in every aspect of our lives. But it more and more it is starting to drive our spending an unchecked that can lead to some bad things. Now I'm not sitting here and saying don't go out and you know, buy the coffee that you want one day or you know, buy those sweets that you want or buy those clothes that you've had your eye on. No, what I am saying though is we do need to understand that this issue exists and you need to be aware of it so that you don't fall into the vicious cycle, if you will. So again, what do we do in the face of this fact that emotion is playing a lot into overspending the United States? Well, the first thing for you individually and again, I'm not going to address this from the aspect of trying to change the whole system. I am somebody who doesn't think that the whole system can be changed, ultimately at least not sitting here talking about it. Instead, what I can do is try and help individual people change themselves or at least change their behaviors. So the first thing you need to do is understand if you're falling into the emotional overspending trap. Take a look and go, what is it that's driving my purchases? And first and foremost, look at all your purchases and go, do I need all of this or is it that I want all of this? And then if you are falling into an emotional overspending trap, you need to then understand what's driving it. Because it's usually something underneath the surface. We're using our spending as a way to again compensate for something else that's bothering us. Deeper doubt. And unfortunately, I'm going to be honest with you, we live in an instant gratification world. We also don't want to address the tough conversations rather, rather than examine ourselves and do the hard work necessary to improve, we're looking for the quick fix. So instead of sitting down and trying to improve our own self worth, we're going out and buying things we don't necessarily need. We're buying an expensive car to make ourselves look more important or at least feel more important. So if you are somebody who you're like, man, I don't know how to get my spending under control. It might be something deeper. And I'm not a psychiatrist or a therapist by any means. I've used them in the past, I've gone to them in the past. And they've helped me with similar issues. So a lot of it comes down to needing to look inwards and get a true understanding of yourself and understand what it is that might be holding you back. The second thing that, you can do is educate yourself on the issue. This is one great way to do that. Just by listening to this and understanding that the issue exists, build the discipline to address it over time. Again, I talked about how we live in an instant gratification world, and we'd rather just find a quick fix rather than examine ourselves and do the hard work necessary to change. I'm going to be a little bit vulnerable here and say that I have my own things that I want to change about myself. And I can be very, very impatient about a lot of that. And I need to sit back and realize, okay, it does take time, but also it just takes some discipline. And I need to have that understanding of that. It takes some discipline. And I'm not always going to succeed in making change, at least not right away. So, you know, I need to celebrate the small improvements, not beat myself up if I falter in any way, but then ultimately sit down and go. It is within my power to make the necessary changes that I need to make. And frankly, no one else can do it for me. That's the message that I have for everybody. If you do find yourself falling into some type of overspending issue or whatever else it might be, from my own experience, you're the only one who can change. Now, that might sound easy for me to say. I won't go into the details of it, but I'm somebody who has actually overcome something bigger. And I realized I was the only one who could overcome it. Nobody else could get me there. Nobody else could truly help me. I was the one who had to make the decision to change my behavior, and I'm glad that I did. But ultimately, that's the message that I have for everybody in this world. Doing things the right way is often going to be the harder way, but it' that's the only way that we can overcome whatever it is that might be bothering us. We have to sit down and do the hard work that's necessary. Some people succeed at that, others do not. And then the last tip that I have, and this is something that I've said over and over and over again, and I probably will, you got to turn off the outside noise. A lot of overspending now, I think, is driven by the, social media age. One of the statistics that I was reading, I think it was 67% of those who found themselves overspending because of stress are millennials. No doubt. A lot of that is driven by the fact that they are surrounded by social media messages that say, hey, buy all of this stuff and you'll feel better. And ultimately it makes it feel worse. And it's like a prescription that has all these side effects that you end up then buying more to address those side effects and you find yourself in a vicious cycle. I'm somebody who doesn't use social media all that much, frankly. The only reason I still have Facebook is for business advertisements and I find myself actually falling into the trap occasionally of just, you know, doom scrolling. But I'm glad that I don't have any of the other platforms where I'm just bombarded by all of these different messages out there in regards to buy this, go do that, spend all of your money and you'll feel immensely better. I think ultimately, and I guess I sound like an old man yelling at clouds here because I'm probably too young to become this cynical about it, I think that social media has actually been a net negative in the world. You know, it started off as a way to connect people, but now it's really just become an overall vanity project. We become a great way for narcissists to show off and get the validation that they crave so much. And for the rest of us, it's kind of led to us feeling like we're less than, that we're not keeping up with, with where we should be. And that's obviously not the case. So my message to everybody has always been turn off the outside noise, get off social media, disconnect if you can. On the weekends, I try to disconnect as much as possible, leaving my phone in another room and going somewhere without it. Don't worry, the world continues to turn. You can get off your devices and move along. But if you find yourself in this pattern of seeing all this stuff on social media and spending as a result of the way that it's making you feel, then I would highly suggest trying to wean yourself off of it. Because at the end of the day, social media can be just as much of an addiction as 'just about any other substance out there. So a lot of what I just said in terms of what to do, it's not easy and a lot of it requires change on your individual parts. And that requires some difficult decisions and some hard fought discipline. But that's the only thing that's going to work, honestly, unless you have figured out something else, and I'd love to hear it if you have. It comes down to self discipline and just doing what's necessary. If you don't agree with me, then I guess we'll agree to disagree. But that's just how I found it to bas. So hopefully you, some of this has been helpful at least in raising awareness to the situation and, you know, maybe helping you. You assess your own situation and go, okay, yeah, I have some room for improvement when it comes to emotional overspending. And these are some tactics that you can employ to, perhaps break yourself out of the cycle. That being said, I hope you enjoyed the episode and I will see you next week.