As I was making my daily rounds of reading today, I ran across an interesting discussion over at Living Almost Large regarding financial sabotage. LAL says that a good example of financial sabotage are those who talk about wanting to get out of debt, but never make a concentrated effort to do so.

Main Street looks at it a little differently. Jeffrey Strain says there are five ways people sabotage their finances.

1. Choosing the easy way out.
2. Settling for a short-term fix.
3. Believing change is not needed.
4. Having no tolerance for setbacks
5. Believing that finances are only about money.

I think LAL’s thoughts run along the same lines, but I like what Strain has to say because it encompasses a lot more. Financial sabotage can be a singular item or it can be a slew of problems culminating in a big mess. In either case, knowing what it is that’s causing the sabotage is the first step towards fixing it. Below I’ve taken Strain’s ideas and expanded them with my thoughts and I’ve offered up some solutions on how to overcome that particular sabotage.

# 1 – Choosing the easy way out

In an instant gratification society, we’re quick to accept what we want when we want it, but with none of the consequences attached. Very often the ‘gimme, gimme, gimme’ attitude leads to debt. And, like the ease with which they went into debt, people want to just as easily get out of debt. Companies will pander to this mindset because it’s what people want to hear, but in truth, digging yourself out of debt is never easy. It does require work and sacrifice on your part.

Solution: Sit down and face the decisions you’ve made that have lead you to where you are. It’s not easy, especially the part of admitting you’ve made some mistakes. But, you can’t sit on the sidelines and hope this clears up, so take some responsibility and make the hard decisions. Look at your spending, decide where you can reasonably cut, draft up a repayment plan, and figure out a way to make it work for you. I’d also suggest you drop the instant gratification mindset at this point because you’re not going to pay that off overnight. It takes TIME.

# 2 – Settling for a short-term fix

A good example of this are those people who cut their retirement contributions to make it through a rough patch, or even worse, cash them in. This is a short-term fix that’s going to have consequences for the long-term picture. Personal finance isn’t about short-term patches, it’s about the big picture. When looking at your finances, you should be thinking long-term and how the ripples of your decisions today will effect you tomorrow. The reality is, if you’re having to cut back contributions or dip into retirement funds at all, you’re mismanaging somewhere else.

Solution: Sit down and reevaluate your spending. Are there other areas that you can reasonably make cuts that do not affect your long-term plans? Can you find areas with which to compromise on your spending to make it through? In LAL’s comments, I used the example of my getting a Netflix membership to stem the flow of cash that was going into my ever growing DVD collection. I still spend money on buying DVDs occasionally, but not nearly as much as before. I compromised with myself out of necessity and now it’s just habit. With Netflix I can watch what I want almost whenever I want. Find the areas within your own spending patterns where you can compromise with a cheaper option to save money.

# 3 – Believing change is not needed

I like Strain’s example, so I’ll borrow it to use here. People who are in debt and believe they don’t need to make some basic, fundamental changes are like those dieters who believe they can keep the weight off simply by dieting, rather than changing their eating habits overall. If you’ve ever tried dieting, nine times out of ten it fails because it’s not a lifestyle change – it’s a quick-fix…see # 1 above for more about this. Once you’re off the diet, you generally gain the weight back. The same is true of finances. Sure, you can use the Dave Ramsey method to get out of debt, but if you don’t change the way you spend money or you don’t build up an emergency fund and instead use those very same credit cards you’ve just paid off, then guess what? You’re going to find yourself right back where you started.

Solution: You have to recognize the need for change before you can be effective in setting your financial house in order. If you don’t believe that change is necessary, you will fail. The best way to set a course of action is to figure out your ‘why.’ Why do you want to get out of debt? What is the driving force behind your reasons? Are you doing it merely because that’s the trend? If so, it’s not a strong enough reason to keep you committed. Are you doing it because getting out of debt means keeping your family financially secure? Well, now you have a reason to stick to it. Sit down, consider your reasons, and write them down. Writing down your goals is a commitment to yourself to achieve them. They become concrete and real, as opposed to a passing fancy in your head. Once you have your reasons in mind and written down, commit to the steps necessary in order to achieve them…start with change.

# 4 – Having no tolerance for setbacks

Guess what? Sh*t happens…pardon my saying so, but it does. Strain again has a great example of this. Oftentimes an emergency fund is needed before it is fully funded. Sometimes your stocks go down before you’ve realized any real gain. Sometimes life happens. If you freak out over a financial setback and think all your hard work and planning is for nothing, you will never get ahead. You have to be flexible in this area, despite the fact that it’s hard to see your plans go to the wayside. If you give up, you weren’t fully committed to the plan in the first place.

Solution: I don’t have a real tip here because this one is up to you. You have to find a way to deal with personal setbacks when they happen. As for the emergency fund, keep in mind, that’s what it’s for. Sure, we hope to never have to use it, but that’s what the money is earmarked for. So what if you need it before you’ve fully funded it? Count your blessings that you had it there as it was and move on. Keep going with your plan and you will get to where you need to be. If you find yourself giving up, ask yourself what it is about your plan that you’re not committed to, revisit your reasons for starting this plan in the first place, make adjustments, and start again. Remember, putting your finances in order is a life-long process. To some degree, you will always be doing this, so don’t let one minor setback (or even a major one) throw you off track. Deal with it and move on.

# 5 – Believing that finances are only about money

I like this thought because it’s very true. We often don’t realize that our finances are interwoven in a lot of different areas that we may not consider personal finance areas. An example of this is your health. If you’re in poor health, that can be a drain on your finances. Taking active steps to rejuvenate your mind, body, and soul can go a long way in keeping you healthy, thus saving you money on doctor visits, medications, and surgeries. Another example of a more indirect nature is how you treat people. You wouldn’t think that would be finance related at all, but consider your attitude towards your coworkers, your boss, and your clients. If you’re argumentative and defensive in general, the likelihood is that you are displaying these traits at work as well and it’s a good way to get yourself in trouble, or worse, terminated. Likewise, keeping a happy, upbeat attitude towards people in general is likely to open the doors of possibility.

Solution: When considering your personal finances, you have to take into account the things that may indirectly affect your finances. Yes, dealing with budgets, debt, and spending are a large chunk of what makes up personal finance, but you also have to consider things like your health, your attitude, and other indirect functions that impact your finances. If you’re feeling stressed out, negative, and tired you’re likely burnt out and need to take some time to recharge. You may feel like you don’t have the time, but you’ll never have time if you don’t make the time. You are your most important asset and the only way to keep everything running smoothly is to focus on yourself some as well. Take a few days off, maybe a long weekend, and pick several activities that you enjoy doing to rejuvenate yourself. I like the Franklin Covey approach. There are four core areas to focus on: physical, mental, social/emotional, and spiritual.

Physical activities could be a form of exercise. Find a class or hit the trails, whatever gets you moving and is something you ENJOY. Mental activities can be anything the stimulates your brain – reading, writing, blogging, puzzles, games, philosophical discussions – whatever interests you. Social/emotional activities include doing something with a friend, going to a book reading at the library, or just surrounding yourself with good natured people you can have a fun time with. And spiritual is anything that makes you feel good inside. This doesn’t necessarily have to be a religious thing – though for some it may be exactly that. Personally, I like to do meditating and a form of pathworking. In my meditations, I pick a favorite mythological story and place myself as the protagonist and envision how the story might go with me there. It’s just a relaxing endeavor that brings peace. For you, it could be volunteering your time to a local shelter, taking a walk through nature, helping your community in some way or other, whatever it is that makes you feel good about yourself.

I spent a little more time on this section, despite this article already being quite long (sorry J.!) because it is vital that you take care of yourself. It’s amazing how effective and focused you can be when you take the time to do the things that make you happy. And, it’s not always about spending money. Sometimes it’s just about surrounding yourself with people and activities that you most enjoy. But, it’s a proven fact that happy people are more productive. Find a place personally that you can be happy with and see if it doesn’t help improve your finances to some degree.

So there you have it! My suggestions for overcoming financial sabotage. Can you think of any other ways people financially sabotage themselves? Do you have any other tips for avoiding the sabotage?

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