Donell Edwards, Blogger
About Donell Edwards: Donell Edwards is President of CWR Media and is also founder and publisher of The College World Reporter (CWR) magazine and CWR World News & Information Service. He is also a professional speaker, freelance writer, and entrepreneur.
Know Your Money
Friday – March 7, 2014
Knowing Your Personal Finances
Step Two – Overcoming The Denial
By Donell Edwards
In our last post we provided you with some resources to begin tracking your spending. Hopefully you have begun the process of honestly, objectively, and realistically evaluating your budget. Let’s be honest, we are all imperfect and no matter how hard we try there are going to be some things in the budget that are very important to us, things that we consciously or sub-consciously have determined to be off-limits, untouchable, the “gotta-haves.” That is the purpose of monitoring spending. To help us discover where the money is going and to eliminate unnecessary spending. This will mean that some of those non-essential “gotta-haves” must go.
One of the major problems when making behavioral changes is accepting the fact that those changes are relevant, that they must be made in order to make progress. Most of us suffer from the “Denial Syndrome.” We feel that maintaining the status quo is in our best interests and don’t see the need to make any changes. We strongly resist any efforts to help us understand the damage our behavior is causing ourselves and others close to us. We are in total denial.
When it comes to our personal finances, this attitude is self-destructive and can result in serious consequences, including the stress of trying to pay for things we cannot afford, maintaining a lifestyle that is beyond our current means, getting deeply into debt, ruining our credit, accounts going into collection, repossession, default on loans, foreclosure, major problems with our family relationships, problems on our jobs, and much more.
So, that is why this post focuses on getting past the denial. Before we can make any progress in improving our ability to manage our finances we must accept the fact that we need to make changes, that our current methods are not effective, that it may be necessary to “bite the proverbial bullet” and do without some of the things that are very dear to us as we get things in our life under control.
Here are some examples of the money management denial syndrome. Although some of these examples may be humorous they are not provided to embarrass or ridicule anyone, they are offered to help those people who fit these descriptions to think and hopefully see themselves in the mirror and recognize the need to change.
The Survivor: This person’s denial results from thinking that because the bills always get paid everything is fine. However, they live from paycheck-to-paycheck and after paying the bills don’t have enough money left to buy a peanut butter sandwich. They beg and borrow until the next check comes in. But because they are surviving they feel that everything is OK. Or they don’t understand why they can’t do better.
The Cheater: This person’s denial has deluded him or her into thinking they can cheat the system by juggling their bills and deciding each month which ones get paid and which ones do not and somehow manage to avert debt collection, and has come to accept this as the norm.
The Faker: I had an associate describe to me his denial at one time in his life. He was a respected and prominent member of the community. He had a very nice home, expensive and beautiful automobiles, a great career, an elegant and expensive wardrobe, he enjoyed expensive vacations and recreation, but he was drowning in debt. He was in denial because although he knew he could not afford this lifestyle, he had chosen as he expressed it, “to fake it until you make it.”
These are just a few examples of money management denial syndrome. If these do not describe you, congratulations. Maybe you can help someone you know who needs help by sharing your money management strategies with them or by referring them to this blog.
However, if you do see yourself in any of these examples and need some measure of help, and you have begun the process of monitoring your spending, we recommend that you do this for at the very least a month, if you have begun that process and discover that you are wasting a lot of money that can be used to pay off your debt and to save, don’t allow denial to interfere with your good judgment.
Some have the feeling that if they admit they need help or if they must make changes in the management of their finances, it means they are incompetent or they have failed. Don’t think like that, what is most important is what you do about your situation. Whatever has happened that resulted in your current situation most likely did not happen in a day or a few weeks or months, most likely it happened over an extended period of time. So understand that it will take some time in order to get back on track financially. But a very, very important step is objectively assessing where you are at the present time, monitoring your spending to see how you got there, and overcoming any denial you may have and get on with the work of making the necessary changes.
An ancient proverb says that “Good habits result from resisting temptation.” Bad habits are usually at the root of most financial problems. That is why it the importance of monitoring spending on a daily basis cannot be over emphasized. This process will reveal bad habits, weaknesses, impulses, and more, if you will be honest with yourself. Once you recognize your bad habits and the need to resist temptation, it will be easier to overcome any denial you may have. But understand that this is a process, and you must constantly monitor spending, and overcome any denial that you may have regarding your need for help and for making change in the manner and methods you currently use to manage your money.
Have a great weekend, and I will be back with more on Monday.
If you would like to share with our readers how “bad” spending habits have affected you, anonymously or otherwise, for our upcoming special, “Confessions Of Spendaholics,” please send your experience to comments@knowyourmoneyglobal.com.
Recommended Reading:
Financial Planning Begins With the Truth About Your Bottom Line
http://www.forbes.com/sites/steveschaefer/2014/01/13/financial-planning-starts-with-the-truth-about-your-bottom-line/
3 Ways to Change Bad Money Habits
http://www.dailyfinance.com/2014/02/10/simple-steps-change-bad-money-habits-infographic/#!slide=2118865
How to Stop Living Paycheck to Paycheck
http://finance.yahoo.com/news/stop-living-paycheck-paycheck-144252805.html
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