Why Can’t I Stick to A Budget?
Picture this: you’re faced with a stack of bills, a looming sense of financial uncertainty, and a desire for clarity. In such moments, the principles of Rational Emotive Behavior Therapy (REBT) act as a steady anchor, providing not just financial guidance but a mindset shift that transforms how we approach money matters. Continue reading to learn how REBT can be used to obtain healthy financial well-being.
Understanding Poor Money Habits Through REBT
Studies have shown that when you are in a positive emotional state you take risks and have more confidence in your ability to evaluate investment options, while negative emotions such as anxiety have the opposite effect (Khunen C.M. and Knutsen B., 2011). In financial contexts, Rational Emotive Behavior Therapy (REBT) is a powerful approach that helps to unravel the intricacies of money-related beliefs and steering individuals towards a rational and constructive mindset for improved financial well-being. REBT was created by Albert Ellis in 1955. This cognitive-based therapy targets irrational beliefs, urging individuals to dispute and replace them with rational alternatives through the ABC model. One of the most challenging (but extremely rewarding) parts of utilizing the ABC model is learning how to identify our core beliefs. They happen so fast that we do not realize we are thinking something that causes us to feel and react. This is extremely important to highlight as we examine our relationship with our finances.
Whether it’s buying, saving, or investing, we are often not aware of the thoughts/beliefs that can lead us to managing our money with recklessness and impulsivity and cause us to feel really crappy about ourselves and our outlook in life. Here are some common beliefs associated with poor money habits and explanations as to why they are irrational:
“I need expensive things to be happy!”: We sometimes make material things into necessities in life instead of acknowledging them for simple pleasures and desires. Whenever we tell ourselves we need something, we tend to seek what we think we need! This belief can create behavioral consequences of impulsive buying.
“I’m terrible with money!”: We get comfortable in identifying our entire sense of as as our bad habits and behavior. If you write yourself as being terrible with money, you tend to do terribly. This thought is self-condemning and does not prompt you for success. This belief can create emotional consequences of shame/embarrassment, guilt, depression/despair.
“I deserve to splurge!”: Usually when we have this belief, we are experiencing a level of discomfort in which we must alleviate by spending. Unfortunately, this can present itself in the form of rewarding ourselves. If our goal is to save money, is it really a good reward when we go crazy at the nearest Target? This belief can create behavioral consequences of overspending.
REBT Techniques for Resolving Money Issues
There are three steps that REBT suggests you take and practice if you want to make lasting changes to your financial situation.
Identifying: By now you know how much of a factor your belief system has on your system! Being able to identify your core beliefs is under stably the first part to financial freedom. It would be beneficial to track your expenses for a week (or two) down to the very last penny! This includes your daily visits to the nearest Starbucks. You may also want to take a look at your bank statement at the end of each week to identify if there are some charges you are not away of due to potential autopay settings. You may also want to keep a journal of your moods as you spend. Make note of any emotional patterns in which you find yourself spending more. Afterwards, write down your thinking before (or after) a huge purchase. This could be as simple as thinking, “I need this,” “If I return and it’s gone it’ll be terrible,” “I can’t bear walking away from this deal,” “If I don’t buy this brand, I’ll look poor,” etc.
Disputing: Once you are able to identify the irrational beliefs associated with your spending habits, you are now prepared to dispute them. In Albert Ellis’ book, Why Am I Broke?: How To Be Sane About Money, he proposed that individuals should stop and ask themselves these five questions before spending any substantial amount of anything. These questions will help you begin to put logic and reasoning behind your purchase. You may even find yourself not wanting the item you thought you needed!
Do I need this or just want it?
What catastrophe will befall me if I don’t but it?
Can I find a way to get what I want while spending less?
Why didn’t I need this three weeks ago?
Could I enjoy myself just as well with a cheaper substitute?
Replacing: After the week (or two), reflect on your results. Review the beliefs that came up for you prior to each unplanned or substantial purchase. As yourself if you disputed with intention and if you disputed, but continued with a purchase, as your tough question why. Start identifying any irrational beliefs that would interfere with your disputing efforts. Identify the successful efforts you made and affirm them by associating them with a financial goal. “I realize that I didn’t need the sweater, but I also didn’t want it as much as I want to go on a trip later this year.” Reviewing and replacing your irrational beliefs with rational ones can help empower you to continue your progress!
Putting REBT into Practice
Disputing irrational beliefs can be even more effective if you do so before planned events or spending. If you are hosting for a friend that is visiting, ask yourself what sort of activating event would prompt you to overspend? or If you must go to ever outing during their stay? If you prepare for future expenses, you will have more control over your spending habits and have a better relationship with money without stress.
People have used REBT to stay within their budgets without buying impulsively and overspending. Speaking with a financial advisor to develop a realistic budget can be a great resource for managing your money. People have also been able to use REBT to feel better about themselves during the habit breaking journey. Becoming financially literate, especially after reinforcing years of bad spending/saving behavior can be quite the challenge. A great way to increase the probability of success if by giving yourself grace along the way.
In conclusion, REBT serves as a compass, guiding individuals towards not only financial freedom but also emotional liberation from the chains of irrational money beliefs. By incorporating these principles into our financial lives, we pave the way for a future marked by conscious and empowered money management. Remember, the journey to financial well-being is not just about dollars and cents; it's a profound exploration of self and a commitment to a brighter, more empowered financial future.
