Metacognition in Personal Finance

Great food on our anniversary camping trip: Proof that metacognition works. 

DH = Dear Husband

“I find that I loosen up my spending when things are going well financially,” wrote Amy fromDebtgal  in response to a recent post here at Fruclassity. “For example, if my husband gets a bonus check and I’m having a good month for sales from my Amazon store, my mindset shifts, and I feel less urgency to save.”

“metacognition”

Amy was engaged in metacognition when she wrote that comment. A simple definition of the word metacognition is “thinking about thinking.” Dictionary.com says that it means “higher-order thinking that enables understanding, analysis, and control of one’s cognitive processes (thought processes), especially when engaged in learning.”

Spending triggers

I know that for all of those years when I maintained and deepened our levels of debt, I wasn’t using metacognition at all. I definitely did as Amy did. When times were extra good financially, I felt a giddy compulsion to spend that extra. I also spent more when things were extra busy. And I spent more when I felt extra anxious about something. I spent more in accordance with bursts of extra love too – especially when it came to one of our children – and at times of celebration.

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2 CommentsLeave a comment

    • Ugh! I’m sorry to hear you’re dealing with overdue credit card bills. Not fun. I wish you well in getting to the root problem behind it, and in addressing it without judging yourself. All the best, Jayson.

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