4 Things To Stop Doing With Your Finances
|December 14, 2011||Posted by Roshawn Watson under Uncategorized|
By: Roshawn Watson
Often personal finance writers discuss what we need to do, particularly with respect to saving and investing. However, it is also what you are willing to walk away from that will determine your future prosperity. After years of providing advice, comforting friends, and dealing with my own issues, here are 4 disastrous behaviors to stop doing with your finances.
Obsessing Over Reasonable Purchases
You have worked hard. You have your emergency fund. You have eliminated consumer debt. You have invested aggressively over the years. In fact, you are on track to be financially independent 15 years earlier than the experts said was possible, so why do you obsess over minutia?
I advocate fiscal responsibility, but I don’t support deprivation for bragging rights. Recall when you began your financial journey and decided your priorities. Remember when you decided that financial abundance was worth pursuing. Remember why you started to save to begin with. Self care is not selfishness. In fact, one of the best gift you can give someone is a better you. That’s because you can help them from a position of strength rather than one of weakness.
Last week’s discussion of value-oriented purchases is particularly relevant here. When purchases that are in line with your core values give you pause because of sticker shock, remember that if you have built a solid enough foundation and have performed due diligence, such occasional splurges can enhance you by improving your productivity, your motivation, and your overall quality of life.
My fellow frugal readers, if you’re in this position, simply ask yourself the following question: “Why do we save anyway?”
Debt is not the Problem. Debt is the symptom of the problem.
The suspicious gambling charges on the credit card may be a clue to something sinister, and I don’t mean identity theft.
Beneath the surface, smiling facades, and Under Armour sportswear, there could be someone dealing with pain. I wish there was a quick answer for every money problem, but sometimes there are real emotional, psychological, and even biological issues that require professional help, such as a financial counselor, a therapist, a psychiatrist, etc.
This is not about creating excuses for financial misbehavior but getting to the root cause. Money problems often mask other pathology. For example, reckless spending could be used to compensate for negative self-worth. Cutting up the credit cards without addressing the disconnect leading to the budgetary malfunction may only provide a temporary reprieve and prove ineffective. That’s because addressing the misbehavior while ignoring the underlying problems prolongs the sickness.
Simply put, the essence of every financial problem is NOT financial mechanics. In fact, over 80% of money problems are BEHAVIORAL. When there’s dysfunction, get the help that’s needed.
Comparing Yourself to Others
There are numerous reasons that may account for someone else’s apparent prosperity, and I sincerely hope that you will concern yourself with none of them (unless you are just looking for ideas to improve yourself). Quite simply, you do not know the circumstances of others. Just because you may be able to approximate their earned income doesn’t mean you know what their passive income, portfolio income, and expenses are like. For example, the person who some may shake their heads at for taking two luxurious vacations annually could own 10 rental properties outright and be completely financially independent. The coworker with the McMansion may have delayed (or decided against) having kids. The friend whose second home is Neiman Marcus could be receiving financial help (economic outpatient care) from the bank of mom and dad. Often you just don’t know.
What I can tell you though is that most financial “short-cuts” lead you down a road that you don’t want to go. Additionally, comparing yourself without taking action to improve your life is a futile exercise at best.
If the people you compare yourself with truly have their acts together, simply wish them well, glean all the wisdom you can get from them, and reassure yourself that there are plenty opportunities for you to achieve the life of your dreams. Don’t let jealousy and envy rob you of enjoying your journey or the opportunity to learn from someone who possibly is operating at a higher level.
Don’t hate, congratulate!
Berating Yourself Over Past Financial Mistakes
Regret is usually a waste of time.(Thomas Crown)
Don’t berate yourself over past money mistakes. If you are over 18, you have made money mistakes. We all have. That doesn’t justify being miserable over what decisions were made 20 years ago. To be perfectly honest, this section is a little bit of a challenge for me to write. I am certainly a fan of a do over. I firmly believe that we can learn, draw inspiration, develop resilience, and create remarkable change all from yesterdays’ mistakes. However, drawing wisdom from the past is not the same as punishing oneself because of regret. Yesterday is in the tomb. Tomorrow is in the womb.
Letting go may be emotionally difficult, especially if you are analytical or really did your absolute best at the time. However, being a slave to past mistakes can rob you of future victories and joys. You are destined to do greater things, but if you refuse to open your hands to let go, you are simultaneously blocking your ability to receive.
In summation, the comfort in holding on to some behaviors is not worth the danger. The power in relinquishing the familiar can be just as revolutionary as more traditional personal finance advice. Recognizing when professional help is necessary and letting go of envy, jealousy, regret, obsessive comparisons to others, and overly scrutinizing reasonable purchases will increase our financial peace as we develop healthy relationships with money.
What you are willing to walk away from that will help effect a significant change in your life. Decide what you will release today!
Lastly, if you like this article, please subscribe to my FREE email updates or RSS feed (reader), Retweet it, Tipd it, Fark it, Stumble it, and tag it on Delicious. Also, click here to receive my eBook for FREE.
Thanks for subscribing to Watson Inc: Personal Finance and Commentaries. If you are reading this on a site other than Watson Inc, you may be reading a stolen article.
Copyright 2012, Roshawn Watson, Pharm.D., Ph.D. All Rights Reserved.