- Pay Yourself First

Without a good-sized chunk of money stashed aside, there is literally nothing standing between you and financial disaster. While you may manage to chug along the way things are now, the slightest change (a sudden spike in credit card rates, temporary loss of income, etc.) could send you reeling. That being said, it’s no surprise that paying yourself first by continuing to save was a common trait of people who survived the Great Depression. You should do the same today, no matter how uncomfortable or counter-intuitive it feels at the time.

- Only Buy What You Truly Need

Together with regular savings, buying only necessities forms the bedrock of the Depression mentality to surviving economic turmoil. You can bet that when people were jumping out of skyscrapers because their net worth evaporated overnight, the people who held it together were not blowing their money on excesses. Similarly, until you conduct a thorough inventory of your spending habits, methodically eliminate waste and ensure that you are only buying what you truly need to survive, you will not be as fortified from disaster as you could be.

- Awaken Your Inner Bargain Hunter

Another defining characteristic of Depression survivors was their relentless spirit of bargain hunting. When money is scarce and the future uncertain, there is simply no excuse for paying full sticker price on any of your purchases. Such times call for a different mentality, one of price comparisons and serious research into where the cheapest prices can be found. Luckily, the Internet makes this task far easier for today’s consumers than Depression-era bargain hunters. A few minutes of research before making any major purchases will usually assure you of getting a better deal.

- Avoid Debt Like the Plague

Today’s recession (much like the Depression of the 1930’s) was caused by excessive borrowing and debt. That being the case, it would be utterly foolish to exacerbate the problem by going into debt yourself (especially if you already have outstanding debt in the form of credit cards or loans.) Going into debt during a recession takes you from the frying pan into the fire, exposing you to the full wrath of collections agencies, ruined credit scores, and possibly even bankruptcy. Rather than allowing this to happen, adopt the Depression mentality: see debt as a plague to be avoided at all costs.

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If you answered yes to several questions above, you are probably shopping as a recreational activity. You have a condition called Oniomania. It is also known as shopping addiction or shopaholism, is the compulsive desire to shop. People who shop or spend compulsively get a feeling of being “high” from the experience. This translates into endorphins and dopamine, natural receptor sites in the brain, getting turned on, creating a “good feeling” and reinforcing the desire to shop or spend.

Credit cards facilitate the spending of money as well as mail orders via catalogues or the Internet. In America, shopping is embedded in our culture; so often, the impulsiveness comes out as shopping addiction or compulsive spending. Shopping addiction and compulsive spending can put a strain on both your finances and your relationships. In other words, shopping addicts buy more than they need and spend more money than they can afford, in an effort to make themselves feel better. It can wreak havoc on a person’s life, family, and finances.

Here are the 10 simple steps to stop the cycle of shopping addiction and compulsive spending:

1. Identify a “need” from a “want.” Learn to recognize wants from needs, and practice controlling your impulses to spend your money on things you don’t really need, and you’ll be able to change your spending habits and end up far ahead financially. Before buying anything, ask yourself if it is a need or a want. If it is a want, let go of the item.

A need is something you have to buy, such as groceries. It may also be a new pair of shoes to wear to the office if your present pair is no longer in good condition. A want, on the other hand, is something you just desire but can do without. Examples are a new CD or DVD, a nice-looking hand bag when you have a dozen other hand bags at home, and a cellphone that’s loaded with so many features.

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