Are you desperate to Spend?

I remember my childhood that when I used to get some money either from my parents, grandparents or relatives, I used to keep it in the piggy bank (mainly the coins) and try to save it as much as possible so that I can spend later when I need. This cycle continued for my whole childhood and I do not have to spend that money and those coins are still lying in my piggy bank (yes I do have some coins in my piggy bank after like 20 years). Now I have given that piggy bank to my daughter and thus I intentionally ask her to add some coins to that piggy bank.

PC: Pixabay.com

Now, because of this reason I have more tendency to save than to invest because that thing is cultivated in my mind from childhood. And that tendency to save money is still within me. If it's absolutely necessary then only I invest and thus try to save it as much as possible. The urge to save is higher in me and that is cultivated from childhood and thus I am trying to build the same thing for my daughter too. Because if we do not understand the importance of saving money from childhood, it will be a big task to learn when you get older.

I guess this also reflect in your investing journey too, where you tend to save more and invest. Also the people who actually have this type of mindset are actually somewhat conservative investor (just like me) where we are not all in, in the riskier asset class and thus try to balance it with debt and equity, along with some real estate and crypto.

Now there are a lot of people who are actually quite opposite to the above personality where they are desperate to spend and live paycheck to paycheck or even spend more than they earn by using loans or credit cards. This is because they are desperate to spend and thus it became a habit of many and and its not easy to come out of this quite easily.

Now let's understand why actually people are desperate to spend. Though understanding is one step in the right direction to make it correct, might be people know it actually but it's good to have a refresher.

Show Off

Yes, people are desperate to spend because of showoff. I have seen people spend a lot of money to show people that they have a lot of money. People are actually buying flat, cars, new phone all on loans to just off to the society.

Financially illiterate

Other reason which I think of is that they are uneducated about finance. If you are financially illiterate you are bound to stay in paycheck to paycheck scenario and you will continue to spend desperately.

Boredom

Now, this is actually true to some people where they think that even if they lose some money they will be excited about the journey. This is actually good but again you should not be desperate to spend a lot of money just to get the excitement.

These are reasons which I can think of is why people are desperate to spend. But again everything drills down to financial education. If you are financially educated then actually you will not be desperate to spend everything which you earn. Now financially education is a must for each individual, I am not saying that people should invest everything they earn. But again the main thing is that people should save and invest something for their future.