The psychology of spending money we don't have

Most people are guilty of spending money they don't have. They often attribute that to easy access to credit, which results in getting buried in debt.

Professor Steven Burgess, Director at Wits Graduate School of Business Administration, says the terminology commonly used like "I have arrived" or "keeping up with the Joneses", and needing to flash your possessions for all to see, damages the financial future for a lot of people.

He says research that he has worked for over 20 years shows that there are some deep complex issues that are at work but these are issues that people can take control over and change their situations.

We are not automatons - People don't put adverts on TV, radio, and media, and we are then driven to do whatever they tell us to do. What it does, is it triggers us to realise the things we already think or feel.

Prof Steven Burgess, Director at Wits Graduate School of Business Administration

The question is, do you fall prey to marketing strategies?

A lot of people today are driven to buy products that show a lot of power and prestige precisely because they are insecure whether they really are that person.

Prof Steven Burgess, Director at Wits Graduate School of Business Administration

People react to money in different ways.

Prof Steven Burgess, Director at Wits Graduate School of Business Administration

He says some people react to money by wanting to help others in the spirit of UBuntu. The opposite attitude is an attitude of anxiety towards money.

That dimension - security versus insecurity - is probably the second most powerful set of attitudes people have towards money.

Prof Steven Burgess, Director at Wits Graduate School of Business Administration

Another key attitude is towards 'spending' versus 'saving'.

We are in the middle of a transformation project and it would be natural for people to react by spending money after an era of apartheid.

Prof Steven Burgess, Director at Wits Graduate School of Business Administration

Social sustainability is key to balancing people's attitude to money, he says.

To hear the rest of this interview, listen below:


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