Money Trouble - Ten Reasons
By Steve Gillman
Different people have money trouble for different reasons
of course, but there are some mistakes and bad financial habits
that are common. They explain why some people have problems with
money over and over again. Why not see if any of the following
apply to your own life. Here are ten common reasons for financial
1. Refusing to think about money seriously...
What if you refused to pay attention or think about where
you were going when driving. You might get lost and have accidents
more often, right? Well the same is true of money naturally,
but nonetheless many people just don't like to pay attention
to it or think about financial matters. It may be that something
from their past has caused them to think it isn't right to think
about it, but the results are continual trouble, so give it some
thought right now and regularly.
2. Valuing appearances over understanding reality...
Want to look wealthier? Go get a loan and buy that new car.
But if you want to actually be wealthier, that's the worse choice
you can make. It may surprise you to know that 40% of millionaires
buy used cars, but this certainly isn't just a lesson about buying
automobiles. Building wealth and using your money wisely is the
deeper lesson. In fact, you might not guess who around you is
a millionaire, since many do not go for appearances. Quit trying
to create the illusion and start working on the reality of creating
Often a person is partly right about whose fault it is that
they are broke or facing financial problems. Unfortunately for
them though, blaming outside forces it is the absolute worst
approach to overcoming their troubles. To blame is to give away
power to others and to outside factors. Look at what your role
in the problem is and what you can do to correct or improve things.
4. Thinking you get more with debt...
Yes, you can have more things right now by putting them on
your credit cards, or taking out a home equity loan. But this
makes everything more expensive, and if you pay more for everything
you buy, doesn't it make sense that over the course of you life
you can't buy as many things? Not only do you get better prices
for cash, but you also save the interest charges. Use debt for
homes, business and investments, and pay cash for everything
else you buy.
5. Ignoring regular expenditures...
Some expenses can be easily stopped at any time, like going
out to eat or buying magazines, but what about your more or less
fixed expenses, like rent, electricity, gasoline for the car,
insurance and such. When these expenses are too high you are
in trouble every time your income dips or is interrupted, or
something expensive comes along. Why not consider renting a smaller
place if necessary, getting a high-miles-per-gallon used car,
and trying to keep all the fixed costs in your life to half of
your income or less.
6. Ignoring where the rest goes...
Many people have money trouble because they have no idea where
the money is going. A friend had pizza delivered three times
per week for about $20 each time. Did he know he was spending
over $3,000 per year on that one habit? Not likely. The solution?
Pen and paper. Record everything you spend and what you spent
it on for a month or two.
7. Ignoring the real cost of things...
When people decide they want something, they sometimes play
games with their own judgment. "It only costs..." they
say, referring to the initial price, but ignoring all the ongoing
expenses. Buy a boat, for example, and you have not just the
payments, but the cost to operate it, insurance, annual license
and registration costs, repairs and maintenance, and more. Some
people are paying $200 for each use of their small boats without
ever knowing the truth. The solution? Star doing the math honestly.
8. Pretending things are more unpredictable than they are...
If car repairs or other surprises that cost less than a thousand
dollars are the source of your money trouble, you need to start
thinking in new ways. It may be true that you don't know when
the washing machine will die or when your insurance rates will
rise, but you do know that these "surprises" will happen
at some time. That means you can plan for them by setting aside
money every week for such "unpredictable" expenses.
Put it in a separate account so it will be there when it's needed.
9. Being too generous with friends and family...
Many people get into money trouble because of their generosity
with friends and family. Whenever they have a bit of money saved
a friend or family member has a need for it, so they help. At
least they think they're being helpful, but then money rarely
changes people's situation if they don't know how to use it wisely.
Also, when you never quite get your own financial situation right
you are less able to help others when you truly can. Get your
own house in order first, and then give wisely when you do give
10. Expecting to get rich quick...
I've known people who spend thousands on seminars that promise
to help them get rich quick, and then find themselves as poor
as ever. It isn't that it is impossible to get rich quick, but
it isn't likely, and the fantasy often gets in the way of getting
rich at all, because it helps us avoid doing what needs to be
done for long-term financial success.Look for ways to make more
money, but be prepared to do what it takes and work as long as
it takes. Schemes that promise an easy solution to your money
trouble usually ignore the root of the problem, which is in your