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Self-Sabotaging Your Finances?

3 Ways to begin changing your mind


There is a reason why less than 40 percent of Americans have enough savings to cover even a $1,000 emergency. Part of the reason is mental. Our upbringing and the environment in which we were raised informs our thoughts about money in a major way and inevitably shapes our habits and relationship with money as adults.


Even when we “know better” we may be unable to “do better” financially with long-engrained mental barriers in the way.



Are self-sabotaging habits keeping you in a perpetual cycle of failed efforts to meet your financial goals, or preventing you from taking action altogether?


Begin your journey toward financial success by tackling the mental and emotional obstacles holding you back with these practical ideas to reshape your thoughts and habits on money.


1. But First, Your Habits

Growing up, my outlook on money mirrored my environment: underdeveloped, poverty-stricken and based on survival. There were many mental hurdles I had to overcome and habits I had to break to change my outlook on money. One of the earliest habits I tackled was learning to control emotional spending: impulsive spending behaviors brought on by one or more emotions (i.e. guilt, anger, sadness, hunger, happiness).


To rein in emotional spending, try this back-of-the-envelope exercise.


On a piece of paper or napkin, write down the thing you want most. Then, answer these questions:

  • Is this item a necessity or a luxury?

  • Do I need this now or can I save and purchase it later?

  • Does this item add value (intrinsic or otherwise) to my life?

  • How many hours of labor do I have to work to pay for it?

  • What emotion am I feeling that is fueling my decision to purchase?

  • Does this item appreciate or depreciate?

Thinking through purchases critically shifts the brain out of ‘autopilot mode’—the place where most of us tend to repeat habitual behaviors, even when those habits keep us stuck. If the answers to your questions are indicative of immediate gratification, lacking value and/or emotionally charged, hold off on the purchase.

Another tool to help you overcome habits that are keeping you trapped is the ‘5-second rule.’


In the moment you feel triggered to spend impulsively, take action by counting down 5-4-3-2-1. This simple action allows you time to acknowledge the negative impulse/emotion and make a choice to replace it with a new, healthy action (e.g. walking away from that $250 blouse that will completely blow your monthly budget). The rule allows you to “beat your brain at its own game” and distract it from ways it might sabotage your goals. Just this minor action can keep you moving in the right direction as a first step toward lasting behavior change.

Read more about the 5-second rule.

2. Rethink Perceptions on Spending

Starting in early childhood, American culture encourages consumption as we learn that spending is a symbol of social and economic status. This belief often leads to attitudes and behaviors that create an unrealistic lifestyle: a major barrier to financial freedom.


Through monthly budget development, weekly tracking and learning to control emotional spending, I developed a R.E.A.L.I.S.T.I.C budgeting system that took me from $1 in savings to over $1,500 a month.


Successful budgeting relies on rethinking perceptions on spending and sticking to a plan. Learning to say “no” to nonessential and impulse purchases, even seemingly inexpensive items, is key. The reality is that small expenses add up fast, and that’s money not going into savings, investments or paying down debt. You’ll also need to learn to say “no” to extracurriculars outside of your budget, even when it means passing up on a vacation or skipping social events. If you struggle with the word “no,” and still feel entitled to “spend what you want because you work hard for it,” here’s a news flash: “no” isn’t an absolute; it can very well simply mean “not right now.”


Budget for the things you need and want and stay on the path to better financial wellbeing!


3. Lean on People and Processes

The right people and processes are integral to staying on track with your financial goals. Accountability partners serve as an objective third party who can help you make sound spending decisions when your biases and way of thinking might get in the way. If you can’t afford a budget coach or financial advisor, there are Facebook groups and online forums with strong communities of like-minded individuals who can offer objective feedback.


Additionally, in the early phases of changing your spending habits, you should automate your budget and savings. Set up automatic transfers to savings, investment, and retirement accounts. Automating your finances can help reduce the conscious choices you need to make. Use a budgeting software like Mint to create alerts that notify you when you’re close to overspending and support you with staying on track.

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