Take a Step Back…Put your Financial Behavior in Check

Debt is sometimes inevitable, unavoidable, and well a fact of life for many. No matter what your stage of life you may be faced with financial issues. Life can take its toll on your finances; unemployment, an unexpected illness, divorce or a death in the family can send you into a financial tailspin.

But sometimes financial issues stem from a cause deeper than the unexpected; the way you think about money. To snap out of bad financial habits it may require some lifestyle and behavioral changes.

10 Financial Principles

Dr. Bernard Poduska, author of For Love or Money writes about how behavior may be to blame for our financial problems. According to Poduska there are 10 basic financial principles that shape the way we think about money.

#1 Financial vs. Behavioural

“Financial problems are usually behavior problems rather than money problems.”

While many of us suffer from financial problems as a result of circumstances beyond our control often our issues stem from the way we think about money and how those thoughts translate into actions that cause us to sink into debt.

Ask yourself these questions:

Do you buy things to ‘fit in”?

Do you spend money to impress others?

Do you buy things to cover up inadequacies in other aspects of your life?

If you answered yes, most likely your behaviour is a contributing factor to your financial issues.

#2 Happy with the status quo?

“If you continue doing what you have been doing, you’ll continue getting what you have been getting.”

We are all guilty of complaining about our lives; financially, emotionally, physically. We want to be debt free, have meaningful relationships, and look good. But when was the last time you put in the “time”? Are you faithfully depositing money into savings? Are you “really” listening to others? Have you been working out and eating right?

I have heard the phrase, “Anything worth having requires hard work.” I have found this to be true in all aspects of my life; financially, emotionally, and physically. We can’t expect results if we don’t put forth the effort and continue to do the same things that cause us to fail.

#3 Is blood really thicker than water?

“Nothing (no thing) is worth risking the loss of a relationship.”

Have you ever been in a position where money has come between you and a good friend or family member? I know I have. I foolishly loaned friend money to help them out of a bind. Instead of gratitude all I have gotten is grief.  They actually made me feel bad for asking about the money after 6 months went by without even a mention of paying the money back. While I can say I won’t let this incident ruin the friendship I think the damage has already been done.

A close friend of mine has let an inheritance ruin a sibling relationship. It’s so sad to see greed and jealousy ruin a family. If you have been or are in a situation like this take a step back and look at what you are giving up for money to help you put things back in perspective.

#4 Ask yourself is it really worth it?

“Money spent on things you value usually leads to a feeling of satisfaction and accomplishment. Money spent on things you don’t value usually leads to a feeling of frustration and futility.”

That is, worth it to YOU. If you value a good cup of coffee everyday or the occasional dinner out, than make room in your budget for these things and cut out the things you value less. Such as, 250 cable channels or unlimited text messaging on your phone. It is ok to spend on what you love but you must understand this may mean a sacrifice in another area.

#5 Cost vs. Value

“We know the price of everything and the value of nothing.”

We often become so consumed with the cost of items we forget to place value on them. Think about this the next time you evaluate your insurance plan or retirement accounts. While the cost of good insurance is often more than we would like to pay imagine the consequences of NOT having insurance when you need it the most. Some of us spend $6 or more a day on bad habits such as smoking without even batting an eyelash, but are aghast when looking at the same price per day for life insurance. Think about it…

#6 Never satisfied

“You can never get enough of what you don’t need, because what you don’t need can never satisfy you.”

I equate this to my shoe collection. I admit I have a compulsive habit of buying shoes; shoes I don’t need! No matter how many pairs I have I will always, in my head at least, think I need one more pair.

#7 Spending vs. Earning

“Financial freedom is more often the result of decreased spending than of increased income.”

In our quest to be debt free and gain financial freedom many of us seek ways to earn additional income. This is great in theory but sometimes the answer is as simple as just spending less. As a society we often “live within our means”; instead of spending the same amount when we get a raise or financial windfall we feel it entitles us to spend up to that amount. Silly when you think about it. That new money coming into our budget could be used to pay down debt or start a savings fund instead of spending it all, right up to the limit.

#8 We always want more

“Be grateful for what you have.”

Instead of being grateful for what we do have many of us always want more. Quite simply our lives may be richer by just appreciating all of the good things we already have. Personal wealth does not always equal happiness.

#9 The best things in life are free.

I love this one because I believe it to be true. My sons smile, laughter, and being outdoors are all free! These are my three favorite things in life and they don’t cost me a penny. Take a few moments to find the things in your life that are free and make you happy.

#10 Millionaire inside and out

“The value of an individual should never be equated with the worth of an individual.”

When I was younger I was always jealous of my wealthier friends. They had cable the latest designer clothes and extravagant birthday parties. Did having those “things” make them more valuable? Of course not the value was in the type of friend they were; a good listener, always there when I needed them and someone I could count on.

Regardless of your financial situation taking a careful look at these ten financial principles may help you gain the perspective you need to make lifestyle and behavioral changes when it comes to your relationship with money.

Photo Credit

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About Suzanne Cramer

6 Responses to “Take a Step Back…Put your Financial Behavior in Check”

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  1. This post just described my entire being in my early 20s! I had just discovered credit cards and all of those behaviors were how I lived my life!! I needed the reality check far earlier in life than I got it. I hope others read this before it’s too late.

    Great post!!

  2. This post is almost overwhelming because there’s SO MUCH good information in one place! I could relate to nearly all of the points you mentioned, especially the quote in #2. I was so tired of the way my financial life was going, yet I kept making the same mistakes over and over (or finding new ways to mess up). Until I made a decision to take action and STOP being an idiot, I was completely powerless to make a change.

    • @Andrea I am so glad you found the information useful! Sometimes it takes hearing the right thing at the right time to make a change!

      @Travis I found myself drawn to #1 as well…It is difficult to make the changes you know you need to when outside forces (my child in my case) draw you back into making the same mistakes. I have learned to say “No” when the budget doesn’t allow and slowly he is beginning to accept and respect my answer.

  3. I can also identify with everyone of these points, but the one that hits home hardest is #1. I’m in debt unquestionably because of foolish behavior. In fact, I’ve been spending a lot of time thinking about this very subject. I’ve come to realize that even after over two years of being enrolled in a debt management plan, we haven’t changed our behavior as much as we could/should have. While we did make significant changes, we didn’t make all the cuts we should have. If we had, it would have made life so much easier. Just NOW we are finally making the changes we should have made long ago….

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