Why Some Financial Plans Do Not
Succeed
We all have heard the advice of earn more and spend less
in order to save more is the key to financial success. Then why
are Americans going into further debt? There are many reasons that
are not addressed by the simple philosophy of the advice "spend less
& save more".
1) Commitment
We are not usually asked about our commitment to a plan of
action before starting. It is always just assumed that one
is committed especially if they are looking for help. Yet,
looking for help does not signify one's level of commitment. When
starting on a financial plan and there is a bump in the road, there
is a choice on whether they will persever or if they will
use it
as
evidence
that
they are
not
good with money. When a person is not that commited then they
will probably choice the later and give up. Failing at the
first sign of trouble can actually be even worse than not trying
at all. Because
if you are re-enforcing the belief that you are not good with money,
it
will be harder to
try again to break this habit later.
The key is to really make a commitment to yourself before you start
that you will persever throught the bumps in the road. It sounds
easy, yet, how many have given up on their New Year's resolution
before the end of February? Part of it is to envision yourself
at the end of the process. What will be different? What
is it that you are really after? People are more likely to
persever when they have a clear picture of why they are doing this
for.
Get out of debt? Have a secure
retirement? These are admirable goals. However, they will
have more power if you go to a level deeper and ask why do you want
it. Why do you want to get out of debt? Do you want to
decrease stress or to live up to your commitment to repay your loans? You
should also include by when you will achieve your goal (measureable)
but make sure it is achievable.
Having a clearer goal will help you achieve it.
There is usually so much shame around money that it
is our wanting to hide that perpetuates the issues. Having a
friend can help you drop the shame by sharing your money secrets. Sometimes
you find that your worrying that someone will find out your secrets
will drain more energy that could have gone to solve your issue. So,
beat this worry to the punch and tell someone. You may even pick
up helpful hints and ideas by having a friend in this process. Someone
who can lift you up when you are feeling down.
4) One size fits all (for selling books)
Everyone is unique with their own set of issues and
personalities. In reading books, know that some of their solutions
may help you and others may not. They key is to try on the
new ideas and see what works for you and use those ideas. Do
not give up if an idea does not work for you, just move on.
5) Scratch the top of the surface (treat symptoms)
Much of the current advice is on how to cut spending,
increase income and save more. Yet, many
of these issues are symptoms of greater issues like lack of self-worth,
fear of money or worry about scarcity. These are the issues that
need to be addressed versus what we do with money. Money is just
energy. When we see the distruption of the flow of energy (e.g.,
with debt), then we need to find the cause and not just treat the symptom
(e.g., debt). It is just like a sleeping pill; you can take it
a night or two if you are having a temporary issue. Yet, if the
issue is still around days later, the sleeping pill is only treating
the symptom (lack of sleep), rather than the cause.
Many programs today are regimenting the programs to
make it easy for people to follow their advice. For example,
automatic saving of 10 percent is easy to set up and follow. This
is not bad advice. However, it is set up this way under the
assumption that people will spend money that they have (lack of self-control). Again,
this is just treating the symptom and not the cause. I find
automatic saving plans are great if they are in conjunction with setting
up a budget and choosing to set aside a set amount. This is
different in that by doing a budget, the person is taking control
over their money versus money controlling them. This is the
first step to getting out of the stuggle is by taking control. Once
you have control, it is easier to adapt to what life throws at you
(e.g., higher gas prices) because you have already know what part
of the budget you can cut.
7) If I succeed then what?
One question that should be asked is how
is your current situation serving me? You may ask how can something
like debt or not saving for retirement be helping me? There are
several reasons that may be very subconscious. I will give
a few examples (may not apply directly, yet start thinking about
your
situation):
- Sometimes sexually abused women will gain weight in the belief
that the weight will make them unattractive and avoid being a
victim again.
- Sometimes people become complacent at work knowing if they
get promoted or become more successful than their friends that
they may lose them of envy
- Sometimes people do not believe that they are responsibile
or do not want the burden of responsibility and show others that
they
can
not be trusted by getting into debt
- Sometimes people fear that if they got out of debt, they would
not have something to complain about to their friends (if this
is their bonding experience)
- Sometimes peope fear getting out of debt because it would show
them that their past could have been avoided that life did not
need to be such a stuggle
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