6 Attitudes That Breed Financial Failure
Financial success or failure is often the result of attitudes — both conscious and unconscious — that affect our behavior. No amount of budgeting and self-control can help us when we’re up against ingrained ideas about money management, spending, and debt. If you’re having a tough time shifting your financial behavior, maybe it’s time to change your mind about money. Here are six common attitudes that work against us financially. (See also: The Secret to Making Tough Financial Decisions)
1. Stuff Is Just as Good as Money
Besides a few important exceptions like our home, car, and other necessities, objects are seldom as valuable as cold hard cash. When you trade your hard-earned money for objects, don’t fool yourself into thinking they retain even an approximation of their retail value for very long. Typically, by the time we file our receipts, depreciation, changing styles, or new technology has reduced our treasures to trinkets.
2. I’ll Start Saving When I Make More Money
There’s no optimal time (or salary range) to begin the good habit of saving. Setting your course early in life, regardless of how much money you make, establishes a routine and habit that can be tweaked as your financial realities and goals change. Many people tell themselves “I don’t make enough to save,” but isn’t the flip-side of that “I make so little that saving is essential"?
3. Time Is on My Side
Twenty-somethings may disagree, but time really does fly. Saving early and often will compensate for most financial mishaps. The twin powers of habit and compounding interest can make huge nest egg from even the most modest income.
4. Little Things Don’t Count
Volumes have been written about the “latte factor,” and various savings gurus argue the point ad nauseum. I’m not a proponent of total self-denial, but there’s something to be said about how our little habits and mini indulgences can, if left unchecked, add up to big expenses. Understanding how our own personal latte factor (whatever it might be) erodes our larger financial goals is important first step in becoming more savings savvy.
5. Debt Is No Big Deal
Everybody carries some sort of debt, right? Wrong. Simply put, most debt is draining, and there’s real freedom to be found in avoiding it. Besides the interest, the worry, and the depletion of readily-available cash resources, debt limits our opportunities — and that is a big deal. With the exception of a home and education, seriously consider how consumer debt is foreclosing on your options. What choices would you make if you didn’t have debt? If you could do it all over again, what debt would you avoid? Do you still emotionally embrace debt even while being intellectually against it?
6. My Lifestyle Should Constantly Improve
We live in a society where the arrow on the chart is always expected to head north. We’ve even come to see consistency or stasis as some sort of warning sign. Companies are expected to cut costs and make more money; consumer spending should increase quarter after quarter; factories are expected to expand. Even our homes should grow, as we trade that “starter home” for something larger. But what’s wrong with a bit of satisfaction in what we already have? Why can’t our lifestyles, after a certain point, remain relatively constant as we work toward our financial security? Maybe it's time to embrace debt-free living as the ultimate new luxury item.
When we change our attitudes about money, we change our relationship with it. And when we recognize how culture is a big part of how we’re conditioned to think about our finances, we can slowly start to shift that thinking. In short, the quickest and most powerful thing we can do to reinvent our financial lives is change our minds.