Money management can be difficult for many of us. Often it's not simply a matter of numbers. That's because money isn't just money. Money is how we buy food and shelter and how we keep the lights on. It represents opportunity to reach goals. Money, like time, often gets away from us. It's an easy resource to mismanage.
So, if you're hoping to start the new year taking control of your money, your first step might need to be finding your financial Achilles heel and fixing it.
What is a financial Achilles heel? I'm glad you asked that. First let me refresh your memory as to who Achilles was. He was a hero of Greek mythology, whose mama dipped him in the River Styx, hoping to make him invincible. And he nearly was... if not for the heel by which she held him, the one vulnerable part of his body. Like Achilles, we all have our weaknesses when it comes to finances. I've listed the ones I've observed in both myself and others, and hopefully, the information below will be helpful. Do you see yourself in any of these?
You tend to rationalize any and all purchases. (I am the queen of rationalizers - I can come up with a reason for any purchase I want to make!) The problem with this is, it often leads us into spending money we don't have.
Rationalizers often whip out the old charge card figuring that when the bill comes due they'll get the money somewhere. Let me tell you, "somewhere" doesn't exist. I know this from personal experience. Oh, wait, it does, too - the groceries! And when I'd have to dip into the grocery budget for my spending boo-boo and Gerhardt would ask, "Why are we eating beans for the third night in the row?" well, I could rationalize that, too. "Beans are good for us. Roughage."
If you're a rationalizer faced with a tempting "must have but can't afford" purchase, try this: list for yourself the reasons why you can't buy that item right now. Use the same creativity you'd use to rationalize a poor choice for coming up with other options or ways to find the money you need for the purchase.
You, you poor thing, are easy to manipulate. As the name implies, guilt spenders tend to feel guilty if they're not spending. A guilt spender has a hard time saying no to anyone - the cute little Girl Scout peddling cookies, the office worker collecting for... you name it, and, of course, the children. This is not to say you shouldn't be generous. By all means, give to your children, support worthy causes. But DON'T part with money you can't afford to party with simply because you feel guilty over saying no.
If you're a guilt spender, try changing your self talk. "I am not a bad parent because I refuse to be an ATM with legs." ... "Not opening my wallet every time someone asks me for money does not make me a bad ____." (Parent, friend, neighbor, citizen of the world- you fill in the blank.) ... "Money can't buy love, not even my children's." If you're feeling guilty over not spending enough time with your children, mother, spouse, or whoever, well, you know what to do about that.
RETAIL THERAPY SPENDING
Anyone who's watched Dr. Phil has probably seen this particular Achilles heel. Retail therapy involves buying things to fill an emotional need. The retail therapy shopper says things like, "I just need a bigger house," or "I always wanted a ____." (Fill in the blank.)
If this is you, well, I feel your pain. I've done my share of retail therapy shopping, too! But that gets expensive and leads to other problems which can involve the need for a very different kind of therapy.
So, instead of heading to the mall to go window shopping (always a dangerous place for those of us with this particular Achilles heel), you might try some different methods of coping with life. Take a hike (literally). Going for a walk with a friend will give you some good exercise and a chance to vent. Distract yourself by doing something fun and rewarding with your spouse, kids or friends. Pray. It's cheaper and will produce lasting results. Volunteer. There's nothing like focusing on the problems of others to get your mind off your own troubles. And, finally, avoid temptation. Don't go window shopping. Seriously, who can do that and not come away with something?! (I still remember the first time I went mall walking with my friend Kathleen. Walking past all those stores with all that yummy merchandise. That mall walk cost me forty bucks!) Also, don't browse through catalogs or search on line unless you are on the hunt for something specific that you need.
DREAMS THAT WON'T DIE
We need dreamers. Most entrepreneurs are dreamers. Without dreams we would never have gone to the moon. Without dreams there would be no Disneyland or (Imagine that!) inventions or novelists. Dreams can be wonderful things.
Sometimes, though, they can also be impractical, poorly researched and poorly funded. When a dream becomes a financial Achilles heel, the dreamer is in trouble. People have lost life savings trying to keep a business on life support long after it was dead. Sometimes, you have to wake up.
If this tends to be your particular Achilles heel, let me suggest that, when it comes to business dreams, before you go about making that business dream come true that you have a business plan, a budget, a time line, and a spending limit. Some dreams don't come true. Sometimes the timing isn't right. It's okay to say, "This isn't working," pull back re-think and start again. It's also okay to say, "This isn't working," and let that particular dream die. You'll dream again. You'll be back.
The decisions we make and the steps we take will either take us to security or disaster. Here's hoping that finding your flaws and learning how to fix them will help you move down the road to financial security. Happy New Year!