Psychological Aspects of Debt and Personal Finance

[KuroMB]

I've never posted on the boards before, but have been reading MMM for quite a while. I've been slowly incorporating the principles into our life (my wife and I) but continue to struggle with getting pulled back into spending. We finally paid off my car (a fairly reasonable 2008 Toyota Corolla - bought used) last month but decided to buy an XBox One this month.

I'm wondering if anybody else feels "ridiculousness" pulling them back in. I'm a substance abuse counselor by day and can't help but see this as a relapse. I'm wondering if you guys view irrational spending as an addiction, which would be treated like any other addiction (abstinence + coping skills).

[Retired To Win]

... I'm wondering if anybody else feels "ridiculousness" pulling them back in. I'm a substance abuse counselor by day and can't help but see this [purchase of an Xbox]  as a relapse. I'm wondering if you guys view irrational spending as an addiction, which would be treated like any other addiction (abstinence + coping skills).

First, you'd have to define what constitutes irrational spending.  For you, in your situation.  Then you would have to test a given purchase against that definition.

If your X-Box is going to allow you to spend umpteen hours having frugal fun -- because it won't cost you any more out of pocket money to have that fun -- then is the purchase financially irrational?  There are shades of gray and individual details involved in the position you have posited.

You see?

[Elliot]

I work in behavioral health and substance recovery, too! I'd say it can be. A lot of time people use the pleasure chemical high of shopping to self-medicate, same as nearly anything.

[KuroMB]

If your X-Box is going to allow you to spend umpteen hours having frugal fun

Good point. I view the Xbox as purely a money pit. Sure I could use it to play free demos, but real games cost money and in only a week, I've already bought the Xbox Live Gold subscription and two games. There are countless other ways I could find to have fun. (That's my logical brain talking) My pleasure seeking brain says "I want it" and I don't really consider the financial ramifications of it down the line. I'm still in the process of paying down credit cards, student loans and medical bills, so I don't really have any room to spend money on frivolous things.

I'm honestly not sure if I'm self-medicating, but I've never been good at impulse control. I do however, find that "playing the tape through" or thinking of the consequences definitely helps as well as just working on finding serenity.

[caliq]

You don't have to buy brand new games -- did you buy an XBox One or a 360?  Because a 360 is totally reasonable at this point and can probably be found second hand for like $50...if you ran out and spent $500 on the One...ehhh.  That might have been a bad idea.

Back to the games -- you can trade in games you've finished for other older used games.  Or consciously choose games with high replay-ability (admittedly console games kind of suck for that, if you're not into FPS's).

If you bought a One I would strongly consider returning it if you still can, especially considering you have lots of consumer debt.  I think most games will be retroactively compatible to the 360 for quite awhile because the latest gen consoles weren't as popular as Microsoft/Sony were expecting.  So you can pick up a used 360 for much cheaper and throw the savings you get from returning the One at your highest interest rate debt...

Or you can switch to a PS3 and avoid having to pay for Xbox Live!  I'm pretty sure PSN is free -- it used to be, but my household is much more into PC gaming so we don't really keep up with console stuff.  We have a 360 and a PS3 but haven't even considered upgrading to the next gens.  They're way too expensive for not that many new features, and there are very few console-exclusive games that can't be played on a computer.