Overspending and an Internal Locus of Control

492 Words2 Pages
OVERSPENDING AND AN INTERNAL LOCUS OF CONTROL Governments and businesses are blamed for allowing people to overspend, but the decision to overspend is influenced by more than external determinants. The role of internal determinants cannot be ignored. “Considering the question of the determinants of household debt in South Africa, alternative explanations are called upon for explanatory purposes” (Stevens, 2008:37-38). Individuals must take responsibility for their decisions to overspend, and learn from their mistakes rather than taking the easy way out and accepting that they were victims of circumstances beyond their control. The words of Victor Frankl, a prisoner in a German concentration camp during the Second World War is a reminder that “everything can be taken from a man but one thing: the last of the human freedoms - to choose one’s attitude in any set of circumstances, to choose one’s own way” (Frankl, 1984:86). A multidisciplinary review of the literature to gain a better understanding of the reasons why individuals decided to overspend revealed that the decision to overspend was mostly explained through the paradigm of rational choice theory. Rational choices are made when individuals endeavor to increase their benefits and lower their costs. Individual choices, however, are not always rational. “Many of our financial decisions are governed, not by logic and facts, but by our emotions and beliefs about money” (Kahler & Fox, 2007:1-2). Individuals also differ in their beliefs about the control they have over their decisions. On a continuum it can vary from an external to an internal locus of control. Researchers have identified disparate reasons for overspending, but no ‘whole person’ viewpoint regarding this phenomenon has been found. In this article, reasons for overspending are viewed through the holistic lens of Personal Interpersonal and
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