Unhealthy Attitudes Can Lead to Financial Ruin
How you value, spend, save, and invest money has more to do about who you are a person than you may realize. You don’t just develop good and bad money habits by chance. Instead, they are usually a result of an underlying personality trait or develop over the course of your lifetime due to your experiences and circumstances. Who you are and how you approach problems in other areas in your life will ultimately create your unique attitudes toward money.
Something as simple as your attitude toward money can have a significant impact on the financial decisions you make. What is a healthy money attitude? Here are a few questions you should first ask yourself:
- Are you a buy now and pay later kind of person or do you save now and pay in full later?
- Are you willing to wait or do you demand immediate gratification?
- Is your shopping out of control?
- Do you have trouble saying no to yourself, kids, spouse or others?
- Do you waste money on gambling?
- Do you spend too much on tobacco or alcohol?
- What is more important to you: buying something or watching your money grow?
- Do you avoid making a budget and just assume that if there’s money in the bank that’s good enough?
It’s possible to do almost everything right in regards to your finances yet have it all undermined by some unhealthy money traits. The questions above are just a starting point when looking at how you treat money. Many of these may apply to you, or maybe just one or two ring true. Either way, certain traits can have an impact on your overall financial success.
Whether you find yourself spending money when you aren’t feeling good about yourself or you simply have a hard time saying no to your kids, these actions can put your long-term goals in jeopardy. A lot of these issues may result in what seem to be just small expenditures. A few dollars here, ten dollars there, and so on. While they aren’t much in the grand scheme of things the real problem is that these behaviors can become habits. What may be small things now can evolve into a habit or attitude that can spiral out of control later in life.
Most of us simply try to place blame on our money problems based on circumstance. I don’t make enough. I got into debt years ago and now I have to deal with it. My house went down in value. The stock market stinks. You know the excuses and we all make them. It’s always easier to blame something else than blame ourselves. Sure, there are plenty of external factors that play a role in our financial situation but even those can largely be altered by our actions.
Blaming the stock market for not having much saved? Maybe it’s not so much the market’s fault but a factor is that you didn’t save enough when the market was down and only buy when things are doing good. Maybe you didn’t learn about asset allocation and took on too much risk. Or maybe you simply waited too long to even get started and now realize you can’t afford any losses. The key is that you shouldn’t beat yourself up over the issue, but you do need to take a hard and realistic look at some of the possible issues that put you into the position you’re in. Don’t take the easy way out and just blame something else, but take some time to look at your own actions and see if there is something you could have done differently to generate a better result.
Addressing Unhealthy Traits
This doesn’t mean you can’t buy things for pleasure and enjoy life and stick to an extreme budget, but what you need to do is recognize is when you are carelessly spending money for an underlying reason or doing something that is creating a bad money habit. For example if you go to the mall and shop when you are feeling depressed, that is an unhealthy trait. Not only are you spending money based on emotions but you are reinforcing this behavior subconsciously. You begin to attribute a sense of feeling good when you are down by spending money. This is a bad long-term habit to get into as it will lead to even more spending and likely force you to buy expensive things you really don’t need.
It is important to be honest with yourself and your habits. Many of these traits we aren’t even fully aware of. Don’t be discouraged if you find yourself with these unhealthy traits. They don’t make you a bad person, they just make it more difficult to reach your financial goals. Whether it’s a spending problem, lack of investments, or a bunch of credit card debt you racked up five years ago, there’s usually a bad habit or poor attitude that led to the result Like any habit they can be difficult to break so start slowly. Going cold turkey can be a sure way to become discouraged.
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About the Author: Jeremy Vohwinkle is a Chartered Retirement Planning Counselor® and spent a few years working as a financial planner. Today, he helps people make the most of their money by writing about personal finance here and elsewhere on the web. Jeremy is also Coach at Adaptu and a regular contributor for other publications such as Intuit, and American Express. Be sure to follow Jeremy on Twitter or Google+.