Everyone has their own quirks and bad habits when it comes to money. These habits can range from compulsive spending or keeping unnecessary subscriptions, to not paying bills and even gambling. Money problems are typically self-inflicted through behavioral patterns where people spend without restraint. Misusing money in such self-defeating ways can drive you into financial emergency and even debt. Regardless of which bad money habit drove you into financial chaos, the situation can trigger numerous additional unsettling emotions, especially if the problem is seen as overwhelming or unmanageable.
Commonly, the initial reaction of people under financial distress is denial. Because they fear facing fact, they continue compulsive spending and continue to ignore the deteriorating financial condition. When, finally, they allow their money situation to sink into their psyche, their finances can make them continuously stressed out and worried. Eating habits can be negatively affected and they can experience many sleepless nights thinking of ways to deal with the overdue bills. In the worst cases, people worried about their financial problem can descend into panic and fear, further impacting relationships and career focus.
People with financial problems can also feel anger. You can feel angry towards yourself for getting into such a situation, towards your employer for not paying enough, towards creditors for charging too much interest. When these negative feelings build up, depression can set in and this can really be dangerous. The parallel financial tailspin and emotional downward spiral reinforce each other and must be addressed at the same time if the person is to fully recover their life and rebuild their sense of control.
There is still hope of changing ways and it only require some understanding and careful thought. What these bad habits are telling you? Rather than justifying it to yourself, you need to face it head on. Set the intention that you will get through this, no matter how painful or humiliating the experience of admitting you’ve caused a financial disaster. You will emerge stronger and wiser to look back on this time where you rebuilt your money situation as a time of personal growth and transformation.
To be able to manage money effectively, you must counter the bad habits with good habit. In order to find relief, you have to learn to take numerous small practical steps and to celebrate the early victories. Start by doing a quick scan of your finances using the FiClub “FOUR+CORE” approach. Consider briefly each of the following, identifying the top actions you can take right now to make improvements, the four financial areas are:
Next, looking at the CORE: it’s the behavioral component representing your ability to bring awareness, willpower and effort to making changes. Most personal trainers, before helping their clients build bulging biceps, will address weakness of the core muscles that affect posture and that help prevent injury to spine and joints when it’s time for resistance training and heavy weights.
“A belief is just a thought that we repeat. We often inherit beliefs from people we trust without considering whether or not these thoughts are helpful or true. We have complete control over our thoughts should we accept responsibility for them. You can choose to hold any beliefs, so you might as well choose to hold beliefs that will help you.”
Cat Volz – Be The 1% - deciding to be rich – available through: www.ii.media
The core begins with beliefs, so setting the intention to get a handle on your finances and emotions is the first step and then building the belief that you can do it follows. The actions will follow after you recognize that there are areas that you need to change. This might be a very tough pill for you to swallow and it can be very humbling so make sure you don’t ignore self-care or the need to get emotional support and encouragement from others. The necessary practical steps to do this: first, know what your spending triggers are, as these are the underlying issues of your budget breakdown. If you crave splurging on something, build the habit of taking some time to think about it. Allow yourself to truly weigh the benefits against the cost of the purchase. Other practical steps include having a shopping list, carrying no more cash than you need, and engaging in productive free recreational activities rather than those that involve spending.
Bad spending habits cannot be changed overnight but take some grit and determination to reshape over time. Through future FiClub posts and through our bootcamps we’ll explore more of the science of habit design as well as some specific saving and earning tips shared by our members. We want to engage the wisdom of the crowd and learn from each other. Please share your story if you have overcome financial adversity or share your struggles if you are currently tackling debt or some other financial headache.