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Track expenses to separate money and emotions

Beverly Bailey, financial counselor

ALBUQUERQUE, N.M. — If your spending is out of control or you spend for emotional reasons, financial counselor Beverly Bailey recommends tracking.

Writing down how you felt about your purchases for a month can help you untangle your money from your heart, she says.

“Write down when you spend, where you spent it and how it made you feel,” she suggests. “It helps build awareness.”

For example, “if you feel compelled to pick up the tab when you’re out with your girlfriends, especially if you have to put it on your credit card, why? Why are you doing that?” she asks.

Even if you can afford it and you want to do it, you still need to consider your motive.

“Is it an issue of control?” she asks. “Emotional spending is like emotional eating. When does it cross the line and become destructive?”

During the holidays, it’s easy to muddle the reasoning. Bailey suggests considering each person on your list and whether you can afford to give that person a gift and whether you want to do it.

If your list is larger than your budget, it’s OK to say that: “Tell them you are going through a personal recession and you won’t be giving gifts this year. Everyone can understand that. And if they can’t, do you really want them as friends?”

Maybe your parents who have downsized don’t really need anything, but could use a gift card to their favorite restaurant. Maybe you never see those nieces and nephews, but you continue to send them a gift out of habit or obligation.

If you find you’re giving gifts to show off, for outward appearances or because of old expectations, it’s time to reconsider.

Even if you can afford something, it doesn’t mean you have to spend the money, she says: “You may want to spend it in another way.”

“You don’t have to spend it all. It seems a lot of people spend for the lifestyle their income suggests,” she says.

Many people have trouble distinguishing a want from a need, a lack of planning from a true emergency.

“Most emergencies are actually predictable, if you think about it. You can budget for most things. Christmas comes every year. If it’s been a couple of years since you bought tires, you need to allocate money for them in your budget.”

She says after she makes her budget, she decides how much money she can spend on extras or for something that appeals to her.

“I take out $100 in cash every month. When it’s gone, it’s gone,” she says.