Buzz
In 2004, 2005, and early 2006, I tried numerous times to improve our finances. I'd make small promises to myself, like cutting back on spending or focusing on paying off credit card debt. But those commitments never lasted long, and soon enough, I stopped believing in them altogether.
This article first appeared on The Simple Dollar.
I eventually adopted the mindset that I would never truly change my financial circumstances, and that someday, some miracle would come along to fix everything.
Upon reflection, I realize there were four major reasons why I couldn’t stick to that change.
Four Reasons Why Nothing Changed
First, I never really felt that I would lose anything. Despite the growing debt, I was confident I could manage to pay the bills. I didn’t face any difficulties until early 2006.
Second, when I honestly assessed the pros and cons of changing my financial habits, the "pros" seemed to outweigh the "cons." It’s tough to commit to change when you genuinely believe the benefits of your current situation are better than the alternatives. While I sometimes felt embarrassed by my financial situation, there were far more instances when I enjoyed the freedom of spending without restriction.
Third, I didn’t fully understand the "pros" and "cons" of better spending habits. My view of frugality was skewed and overly negative. Additionally, I tied too much of my happiness to the things I bought, which led me to see staying on my current path as "happy" and changing as "sad," which was totally misguided.
Finally, I thought my "future self" would eventually come to my rescue. I was planning on doing this and that, earning lots of money, and eventually accumulating so much wealth that all my problems would disappear. So, why not spend now? I placed a lot of faith in my future self making a fortune, which wasn’t exactly a reliable plan. In reality, I was shackling my future self.
When Change Finally Happened
All four of those factors had to be broken down before I was truly ready to make a financial change. Here’s how it all came about.
First, I got scared. In April 2006, I reached a point where I honestly couldn't pay my bills. My checking account had barely any funds, and my credit cards were either maxed out or nearly there. I was completely lost about what to do.
Second, I began to learn the real meaning of frugality and financial responsibility, rather than relying on my own misconceptions. I dove into a stack of books on personal finance, frugality, and debt management, and quickly discovered that it didn’t have to be painful. Frugality simply means trimming down the unnecessary things in life so that you can afford what truly matters and keep a healthy balance.
Third, I started realizing that I valued experiences over material possessions. I used to collect books, but now I collect the books I’ve read. I used to collect movies, but now I collect the movies I’ve watched. I’d rather try something new every weekend than repeat the same old routines, and most of those new things are either cheap or free.
Finally, I realized that I was already living as my "future self." There wasn’t some magical fairy godmother coming to save me. Every time I overspent, I knew I’d eventually have to pay for it and lose out on better opportunities down the road. Spending money on unnecessary things each week means a smaller vacation or more stress from debt. My actions today either open up or close off opportunities and choices for tomorrow.
Some of these realizations required specific events to take place in my life. You can't just have a "financial scare" – it happens due to circumstances beyond your control. Likewise, understanding the importance of experiences takes time as well.
However, you can actually make the rest of this happen. There’s nothing stopping you from learning about personal finance and frugality from sites like this one or from fantastic books like Your Money or Your Life. There's nothing stopping you from taking time to reflect on the long-term effects of your spending choices. All of these are journeys you can begin at any moment – and, if you’re anything like me, they will lead to financial change.
Financial change isn’t just a flip of a switch. It requires many factors to align. Good luck!
Trent Hamm is a personal finance writer at TheSimpleDollar.com. After pulling himself out of his own financial crisis, he founded the site in late 2006 to help others through financially difficult situations; today the site has become a finance, insurance, and retirement resource. Contact Trent at trent AT the simple dollar DOT com; please send site inquiries to inquiries AT the simple dollar DOT com.
Photography by Stefan Neuweger & Sarah Reid.
