Fibbing To Yourself About Your Finances
What does the word "money" bring to mind? Are the associations positive or negative?
Beliefs about money are complicated. It can be seen as a symbol of one's self: respect, love, freedom, control, power, worth, and perhaps more. Since discussions about money are rarely open dialogues with friends and family we may have money lies we tell ourselves that change the way we think and act regarding our finances. Here are some common finance fibs:
"I'll be happier when I have (insert a number)". Putting too much emotion into a target number can set us up for disappointment. However studies show that realistic goals for earning, saving, or a budget, coupled with steady progress can be incredibly satisfying.
"I deserve it, I don't do this often." Making an expensive purchase or spending money not in the budget by rationalizing with ourselves is a common behavior. We tell ourselves it's ok to swipe the card to self soothe the logical part of our brain that is saying "we really didn't need this purchase", or "it is too expensive".
"I'll save more later." Prioritizing the present over the future, and/or saving what is "left over", is in essence preparing to fail. It will take a lot of heavy lifting to play catch up in our savings if we wait until retirement becomes a point on the horizon. Starting with simple and manageable goals now will establish positive and satisfying habits that are rewarded in the future.
"There is good and bad debt." Many of us think of mortgages and student loans as "good debt", credit cards, "bad". However all debt comes with a cost. Instead of rationalizing whether our debit is "good" or "bad", understand the total cost of the interest on the debt over time. Also analyze whether the loan will help you achieve your goals overall.
I think we all have at one time or another told ourselves one of the above, or maybe even a few other common finance fibs out there. By recognizing our beliefs and behaviors regarding money, or the lies surrounding it, we can reset out thinking, change our behaviors, and make progress on our financial goals, now and in the future. If you're looking to understand how to shift your money mindset, we're here to help. Contact an oXYGen Financial Private CFO® to discuss our role as your accountability partner.