Breaking out of the Money Rut

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John Henry
With over 15 years of debt management and financial services advise, the author has significant knowledge of the financial landscape in the UK and International markets. Having helped dozens of people with their financial problems the goal is to extend that ability through the power of the Internet to the millions more that need simple and easy to understand financial advise ... THAT JUST MAKES SENSE!
John Henry
John Henry

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John Henry
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Dieting – specifically crash diets – is almost always doomed to failure.  Everyone knows that person next door who managed to lose an astounding amount of weight, only to gain it all back (and more) as soon as they fell of the wagon.  Just like dieting, it is possible to get into bad habits with your money and while going cold turkey might work for some people it is not the strategy that I would advocate for everyone.  Simply put, once you deprive yourself of something that you have grown accustomed to having, your thoughts will not be on the positive eventual outcome of why you have quit in the first place but rather on what you no longer have and as such it is almost inevitable that you will lapse.  A great example of this are the people who shop when they are depressed – the endorphin high they receive by making that purchase quickly disappears when they get home and look at their bills … they simply slide straight back into depression – even deeper than they started!

A habit is simply a pattern that you have grown accustomed to … the social smoker who only smokes when out for a drink is as addicted to his vice as the pack a day smoker.  While he is able to put his habit into abeyance at other times – when out at the pub he needs to have a cigarette simply because that is how he has trained his body.  Simply willing yourself to change a habit is extremely difficult to do – it is not simply a matter of willpower as much as you would like to believe it is.

Ill habits gather by unseen degrees –
As brooks make rivers, rivers run to seas.
~John Dryden, Absalom and Achitophel, 1681

Knowing and Acknowledging

One of the biggest reasons that Alcoholics Anonymous is successful is the fact that the participants of the program need to acknowledge the fact that they are an alcoholic.  With any habit the first step in beating it is acknowledging the problem.  If you have a problem with money your first acknowledgement cannot simply be when you see the

bill at the end of the month, you need to know that you have a problem and keep this uppermost in your mind throughout the course of the month.

Fortunately there are many tools available today for those with Smart phones that simply did not exist in the past that can help with this.  Programs like Mint can provide you with real time bank balances while on the move and many banks are also rolling out applications that integrate with these devices so that you can see not only where you are spending your money but also how much you have left.

Knowing how much you have is not the only thing you need to be aware of.  You need to know why you shop/spend – is it because you are depressed?  If not, what is your reason for shopping and spending money?  Once you know why your “pattern” kicks in, you will be a huge step forward to determining the actions that can be taken to avoid falling into the same pattern.

Addressing the Problem

Once you know what makes you fall into your habit routine, you can start looking at solutions to address the issues.  This is not simply avoidance but rather the creation of “new habits” that encourage the opposite behaviour.

This is not an easy exercise as often a “good” habit simply does not have the same emotional impact and endorphins high that a bad habit does – however this too can be trained and encouraged.  For example if you are the depressed shopper, perhaps instead of spending that amount in the shop you might want to think about investing in a fitness membership or simply going for a run – physical fitness has its own rewards, but it will also provide you with a similar positive feeling.  As you continue to practice this, your body will gradually acclimatize to this new activity and grow to expect it.

A more long term approach is the creation of an emergency fund or investment fund … utilizing this as a positive motivator when depressed (see how much money you have!) can definitely help to address the issue.

Fixing bad habits – just like getting out of debt – is not a quick fix.  It took you a while to get to this place, it will take just as long to recover from it and the only way you will fail completely is by failing to try at all!