1. We make excuses. Do any of these sound familiar?
- I’ve never been good with money.
- Financial information is too complicated for me to understand.
- I’m not good with numbers.
- I’ll never be rich.
2. We rationalize spending. “I work very hard. I deserve expensive vacations, lots of pricey designer clothing, and dining at gourmet restaurants every week.” It’s the “life is short” syndrome. Life won’t feel so short when you’re 85 and still working to pay your bills. Sometimes you convince yourself that you’re making the right decision to protect your ego. If, however, you’re responsible with your money most of the time, you can splurge once in a while. This helps to create balance in your life.
3. We don’t want to be thought of as cheap. We perceive that others may judge us by what we have, or may think less of us when we spend our money conservatively. Improving your self-esteem should not be an excuse for buying things. The momentary “high” you get from making a purchase fades quickly when you receive the credit card bill in the mail and you don’t have enough money to pay it.
4. We think it takes too much time and effort to be smart with our money. Actually, once you develop good habits and reinforce them, they will take less time and effort, and will be easier to maintain.
5. We’re afraid that we may sound foolish if we ask a question. If you don’t ask for clarification about a charge or a bill, you won’t know whether it’s a mistake that should be corrected so the money can be returned to your pocket. In addition, if you don’t ask for a discount, you won’t know if you can get one. Don’t be embarrassed to ask, “Is a discount available for this item or service?” If you don’t ask questions you won’t become smarter about your money.
6. We love instant gratification. Why wait when we can have it right now? We give ourselves permission to run wild and make purchases without thinking them through.
7. We fall for sob stories and let emotions control our behavior. Boyfriends, girlfriends, co-workers, friends, and our children beg us to help them by lending them or giving them money. Beware! Personal loans often turn into losses (uncollected debts). Sob stories can represent a red flag warning for you to run, not walk, away from! It’s harder to say no when your children (including adult children) ask you for money. You don’t want to enable more bad money behavior by giving or lending them money when they don’t have enough of their own saved. Tough love is hard, but necessary. You may want to read this paragraph again.
8. We’re in denial about how much we spend. Ignorance is not bliss. Often, we’re in such a rush that we don’t know what we spend our money on, or how much we spend. We confuse needs with wants. “I’ll buy this now and figure out how to pay for it later (or not).” Try writing down everything you spend money on for a week or two. This may help shock you into reality. “Make the pen your friend before you spend.”
9. We think that shopping is a hobby. Even if it makes us feel better, shopping shouldn’t be used as an excuse to get together with friends.
10. We trust people too easily. Proceed with caution when solicitors, salespeople, and self-proclaimed experts try to persuade you to buy something, to donate money, or “to get rich quick.” Remember the old adage, “If it’s too good to be true, it usually is.” Some may intentionally want to scam you. Others, who are just trying to earn a living, may persuade you to make decisions that are not in your best interest.
11. We procrastinate. Putting off financial responsibilities often leads to rushed decisions or missed deadlines. Costly choices we regret, late fees, penalties and missed opportunities all represent the price you can pay by not tackling money responsibilities on time.
12. We don’t plan ahead. At first glance, you may think that this reason is similar to the previous one. Although they both have to do with time, procrastination relates to putting something off, or a delay. Not planning ahead also affects your future, but usually more in the medium to long term. Often times, we forget to stop and think about the impact a decision today will have in the future. Not setting financial goals and making plans to achieve them can have severe consequences. More specifically, if you don’t plan for financial emergencies, although they are likely to happen to everyone at some point, guess what? You may be forced to do things you’d rather not do.