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.
