Becoming financially independent requires that you live below your means and pu tsome money away for the future but there’s more to it than that. Something as simple as your attitude about money can have a significant impact on the financial decisions you make. You can read all of the books, blogs, or money magazines you want but if you don’t change your underlying attitude and habits regarding money you’ll never reach your goals.
So what does it mean to have a healthy attitude about money? It comes down to setting priorities. Some of these might be obvious while others are not. For example, we all know that you should only buy something if you can afford it and avoid putting it on a credit card and then only making the minimum payments each month. But it goes beyond the basics and has a lot to do with how you value the money you do have and how those values affect your financial decisions. Here are a few questions you can 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 when you’re feeling sad or stressed?
- 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?
It is possible to do almost everything right in regards to 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. When looking at these questions you may spot a few issues that apply to your life. These traits can ultimately have an effect on your overall financial situation and being able to spot the problems early can go a long way in helping you create a healthier attitude about money.
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. It may not seem like much money at the time but that isn’t the important part. It is that these small actions add up and 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.
Addressing Unhealthy Traits
This doesn’t mean you can’t buy things for pleasure and enjoy life, but what you need to recognize is when you are carelessly spending money for an underlying reason. 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.
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. Like any habit they can be difficult to break so start slowly. You might want to begin by looking at your budget. You don’t have a budget you say? Well, it’s time to create one. Here’s a quick primer that can help you create a budget. Once you have a budget and begin to track your spending you’ll start to see trends emerge. If it seems like more money is going to a certain area than you expected it could be a sign of an underlying problem. You can then go back and see why you’re spending so much there and see what actions you can take to correct it.
Author: Jeremy Vohwinkle
My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.
