financial abstraction

The danger of financial Abstraction

financial abstraction

I was recent­ly watch­ing a ted talk the oth­er day and the top­ic of dis­cus­sion was finan­cial abstrac­tion. This term is used when mon­ey is not seen as real. When this hap­pens it has less per­ceived val­ue and is not treat­ed the same way as real tan­gi­ble mon­ey. Let’s talk about this.

There are so many cas­es of peo­ple who see mon­ey as hav­ing less val­ue. It may be because we can­not feel it or touch it. Nowa­days we devel­op a type of detached feel­ing to mon­ey and are more like­ly to spend indis­crim­i­nate­ly.  This feel­ing hap­pens because we rarely hold hard cash any­more.

The cred­it card is a prime exam­ple of this finan­cial dilem­ma. How many peo­ple do you know that find them­selves trapped in cred­it card debt? and trust me that is one of the worst debts to be in because of the astro­nom­i­cal inter­est rates. In this mod­ern age, it is so easy to get drawn into over­spend­ing. We use cred­it cards to buy stuff on Ama­zon, eBay, and many oth­er e-com­merce sites.

These sites often make the prod­ucts so entic­ing, our brain just keeps telling us to spend more and more. So how do we deal with finan­cial abstrac­tion? You need to change your per­cep­tion of how you see mon­ey and how you see a cred­it card.

Peo­ple get cred­it cards with­out under­stand­ing how it works. This  them to become buried in debt. One way to snap your­self out of finan­cial abstrac­tion is to think of debt as slav­ery. Now being a sen­si­ble indi­vid­ual would you will­ing­ly sell your­self into slav­ery? I don’t think so.

Under­stand that a cred­it card does not mean you have extra mon­ey. you still have to pay back every­thing when you buy things. Just think about it for a minute. Sure it will help you out in a tight spot, but what you are actu­al­ly doing is spend­ing next months pay if your work­ing. now I’m not telling you to avoid cred­it cards that is up to you. A cred­it card may actu­al­ly be a valu­able asset if you use it prop­er­ly and man­age your expens­es.

It can also become a dan­ger­ous lia­bil­i­ty and can drag you down into debt and despair. Finan­cial abstrac­tion holds a poten­tial dan­ger. It caus­es peo­ple to see mon­ey as mere num­bers in a com­put­er. We see num­bers all the time and as a result we have grown to asso­ciate less val­ue to it than if we were to hold mon­ey in our hands.

A per­fect exam­ple of finan­cial abstrac­tion is when chil­dren buy stuff using parent’s cred­it cards. Because the mon­ey does not belong to them they have a detached feel­ing to it and they over­spend.

Do you suf­fer from finan­cial abstrac­tion? what are you doing to get out of the habit? leave a com­ment below let me hear your thoughts and as always stay focused.

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