Today’s topic (bad money habits) calls for a little bluntness… a bit risky, I know, but necessaryfor any Greater Memphis person finding themselves in debt to the IRS.
And I’ll give a caveat here and say that what I’m talking about today has nothing to do with people in truly difficult financial circumstances… You know, balance-sheet-wrecking things completely out of your control. Things like unexpected medical emergencies not covered by insurance or a business situation that takes a detour for the worst… or a deadly tornado ripping through your hometown. (Our hearts go out to those who were affected this weekend – here are some ways you can help those areas hardest hit in Kentucky.)
But for anyone else, it’s time for an early intervention.
Things are expensive no matter what situation you’re in… single, married, parenting, divorced, retiring, etc. And with inflation ballooning right now, it’s certain we’re all feeling some strain on our finances. Some of you may even be working multiple jobs to stay afloat.
But, using any of these as reasons for why you’re struggling to keep money in the bank means there’s a bigger issue lurking behind the curtain.
If you’re up for it, I’d like to put on my “coach” hat today and inspire you to break some bad money habits and reach for financial security (‘cause I think you owe it to yourself to chart a new path).
I want my Greater Memphis clients to think properly about these things … because when times of crisis do come – however intense or unexpected – it’s much easier to work from a place of continued strength than from weakness.
Bad Money Habits Keeping Greater Memphis People in Debt
“Knowing trees, I understand the meaning of patience. Knowing grass, I can appreciate persistence.” – Hal Borland
We’ve seen all kinds of clients waltz through our doors asking for help to get out from under IRS debt. That’s what we do.
And let’s get this in the open right away: There’s no shame here. We understand that for every “bad money habit” or trend, there are deeper issues at play. And our job is to help you deal with “what is” — and not make you feel bad about “what should have been.”
The purpose of this note is to wave some flags at you that will be truly helpful. Our goal is to serve our clients by offering help for these kinds of situations.
But perhaps there are a few habits pulling you down right now…
Bad Money Habit #1: Not budgeting.
Yes, sticking to a budget (or starting one) can be scary, and learning about your true financial situation can be a downer. Frankly, get over it. PLEASE. At the very least get some help with it, find your net worth, add up all your debt, track your spending, and build a budget that reflects your true reality — not the world you prefer to live in. Only when you face the facts — by spending the time to manage your money — will you stop losing ground.
Bad Money Habit #2: Not paying off debt.
If you’re lacking a plan to conquer your debt, then you’re going to do more than “lose ground” — you’ll go broke.
It’s time to look at ways to increase your debt payments. Paying just the minimum balance is a sure-fire way to keep the debt around your neck like a noose forever, so dig into that debt by paying it off sooner.
Bad Money Habit #3: Not saving.
Perhaps you used to be a saver — and now you’re resting on previous good habits. It may be time to INCREASE on that front, or at least return to what brought you upward in the first place. Saving even just a smidgen more of your income is a wise way to get started again. Take a good hard look at your spending patterns, your subscriptions and services, and find ways to cut back.
For example, downgrading your television package — or canceling it completely — adds up to money that could be put into high-interest savings or investment account. The idea is to be consistent and set up automatic deposits into a specific account set aside for emergencies and long-term plans. (Again.)
Bad Money Habit #4: Not resisting the temptation to spend good money on junk.
The marketers for sure love it when you spend your hard-earned money on modern debris. You know… the stuff that’s cluttering your house and bursting out of your front door. It’s the disposable, upgradeable, and superfluous stuff you buy in a heartbeat because “You’re worth it!”
But it costs. It consumes your space, it can initially make you feel good but can lead to feelings of guilt, and can make you (eventually) broke. Please, learn to identify junk and end the spending spree — because yes, you’re worth it. <smile>
Bad Money Habit #5: Not earning enough.
This is a toughie. If you’ve cut the junk, you’ve made a budget, and you’re still inching down your savings, you need to fix the income side of the equation. I’ve known people with 3 jobs — THREE JOBS — to make ends meet. They work their tails off to earn enough money to cover the rent, buy better quality food, and pay off student debt. If need be, they didn’t own a car, didn’t wear fancy clothing, and didn’t wine and dine on the weekends.
The answer here isn’t easy — you’ll have to find a way to make more money. Even in a choppy economy, *if* you can swallow your pride, there’s always a way. And, with the Great Reshuffle, there are plenty of jobs out there right now for the taking
Bonus, there are more ways than ever before to build something on the side. Leverage that social network of yours and take the entrepreneurial leap.
If any of these resonate with you, then good … if not, then I do hope that you keep on maintaining the excellent habits that got you here in the first place.
I hope this little dose of “tough medicine” goes down smoother than anticipated. And also, I hope you’ll forgive me for my possible insensitivity. The reality is, I wouldn’t say this if I wasn’t in your corner. If you’re one of my clients doing quite well, huzzah. Keep at it. But sometimes it’s important to admit when you’re not.
Fighting for you,