Are you an Emotional Spender?

Understanding how shopping really makes you feel can help you identify how your emotions impact the way you spend. It's important to note your emotional motivations for shopping, in order to assess if your emotional needs are actually being fulfilled by spending.
You probably have a mixed experience when it comes to your stress level around money. At times it may feel difficult to get your finances under control, while at other times you feel good about making clear and informed decisions about your money.
Money can create a good deal of anxiety and worry for you if you let it get out of control. However, you are closer to financial empowerment than you think, and all you have to do is take control a little bit at a time. Following are a few simple ways to get started in turning around your financial fears and alleviating your related worries.
Here are 10 smart choices that will help you create a stronger financial foundation, less financial stress and the freedom to enjoy your life more fully:
1. Identify Past Choices

Choices that have led to financial frustration and stress. Stop making those choices, starting today. One of the most important choices you can make with your money is to learn from your past choices. Use failure and frustration as a learning tool for future success.

2. Pay off Credit Cards Before other Debt

High balances on revolving debt, such as credit card debt, negatively impact your credit score more than loans that are scheduled to be paid off in a set number of months or years such as a car loan, student loan or mortgage. One of the fastest ways to improve your credit is to pay down or pay off your credit cards.

3. Use Credit Cards only if you believe you can pay in full each month

The average American household carries more than $8,000 in credit card debt with no hope of paying it off in the next 60 days, according to the most recent statistics. Make a decision to live within your means, using the money you have rather than money you have to borrow.

4. Change your Lifestyle if necessary

Sometimes building a strong financial foundation requires sacrifice. If you need to "downsize" your lifestyle so that you can become more financially strong, do it! When you have a purpose and vision, and understand the importance of a firm financial foundation, it is empowering to make tough choices such as keeping your old car for a while longer, waiting to buy a bigger house, or curbing the shopping sprees while you save to buy your own home.

5. Get Insurance

Health, Life, Home or Renters, Auto and Disability etc., that you feel confident will meet your needs in the event you need to use it. No one ever expects a crisis, but it is comforting to know that in the event of one, your finances won't be completely destroyed. An illness, fire, or accident is stressful enough. Make sure you are covered in the event of unfortunate circumstances.

6. Establish a Financial Cushion of 6 to 12 months of expenses

Make this a priority goal and begin saving towards it, even if it takes you five years or more to reach your goal. Knowing that financial ruin is not a couple of paychecks away is a very empowering feeling. It will often keep you from making decisions out of fear and empower you to make decisions based on your purpose and vision.

7. Invest time in your own Financial Education.

One of the main causes of financial problems is what I call "financial illiteracy." Some companies make a great deal of money off of the financial ignorance of otherwise intelligent people. Spend two hours or more per month learning about wealth building, debt elimination, investing, and real estate. Read books or articles. Attend a seminar. Learn from those who handle their money well. The more financially literate you become, the better off you will be.

8. Refuse to be an Emotional Spender

Have you ever spent money on your children out of guilt? Or in an effort to win the affection or admiration of others? Do you shop when you are feeling down? Do you buy things you can't afford because they make you feel better about yourself? Have you co-signed on credit cards or loans even though your intuition told you not to? If so, you have engaged in "emotional spending," an expensive habit. Recognize your propensity to spend emotionally and make a decision to change your behavior. Wait 72 hours before making a decision about an impulse purchase. Question your motives before spending money. And make sure you spend your money in a way that reflects your vision and purpose.

9. Have a Vision, Set Goals!

Last week, I challenged you to create a vision for the five key areas of your life. One of those areas is your finances. One of the reasons it is important to have a vision is because it serves as a reference point for where you are headed. When you are building towards something specific, it is easier to tell when you get off track. If you have no vision or goals, you often don't even realize you are on the wrong path until something goes terribly wrong!

10. Put Money into Proper Perspective..

Having money can certainly make life easier, more convenient and less stressful. But always remember this: If your biggest problems are money-related, consider yourself VERY blessed. Money problems can be fixed. There are other more important things in your life - your relationship with God and the people you care about, your health and your integrity, to name a few. Don't allow financial frustrations to ruin your relationships, cause you to be angry with God, do things that compromise your integrity, or stress you out to the point of causing high blood pressure, panic attacks or other health problems. Count your blessings and remember that life's richest rewards will never be found in material things.

My challenge to you this week:
Re-read these 10 smart choices. Then decide what changes you need to make to build a stronger financial foundation for your life. Write them down and take action!