Blame childhood for financial immaturity

Why is it that some of us are like bees, good at saving money, and others are still living paycheck to paycheck even though they are well into their forties? “The child within” theory is finding more and more proponents.

This theory holds that our spending habits are formed in childhood. People who are bad at saving grew up in poverty and learned that money must be used as intended when it comes by. Or they were born in fabulously wealthy families, and their parents took them shopping as a pick-me-up.

As you can see, there is plenty wrong with this theory.

It does not take into account the fact that someone who was poor would learn to save as a means of ensuring security, or that you do not stay rich by squandering your financial resources. This is not to say that consumption models are not acquired in the family. Our parents influence us in every way.

But there is more to it.

Marketing experts are always looking for new and more efficient ways to cheat us out of our hard-earned cash. One such way is by stimulating impulse buys. Souvenirs are a typical example. If you were on a vacation somewhere and really enjoyed it, you would be likely to buy a souvenir reminding you of that time as a way to let the memory linger. You end up buying some ridiculously overpriced item that you do not know where to put later. It ends up going in the bottom drawer of your desk.

Impulsiveness itself is a generalized trait. Some people never work on this, and they are every salesperson’s dream. They march into the store, fall in love with something, and march back out with it.

In some cases, this involves shopping therapy but usually, it is just the trait. They never work on this because it is a source of great pleasure. Plus, they usually have enough money to afford living like this, either because they make a lot or because someone supports them.

One of the biggest myths is that human beings are rational.

Nothing could be further from the truth. Homo economicus is a dying breed, if it ever existed. How many commercials appealing to reason can you think of? One, two at best. Producers target our emotions and instincts. They use emotions like joy, satisfaction, prestige, happiness, freedom, and nostalgia to turn our attention to their products.

Sex and marketing is a whole separate topic.

Advertisers use non-verbal techniques like pictures and music. Verbal messages involve risks – they are processed cognitively, while techniques appealing to emotions yield fast reactions. And with the endless supply of goods and services for all tastes, fulfilling needs you did not even imagine you had, it is a wonder that some people manage to save any money whatsoever.

Some people are not tempted by the wide array of items on sale. When they drop by the supermarket for bread and some cheese they buy just that. Certain individuals are blessed with inborn prudence. It can verge on stinginess. There is a fine line.

Melissa Dean writes for, a website offering an unbiased perspective on Canadian lending industry.

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