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Crazy Checks

Thought for today:  All deception in the course of life is indeed nothing else but a lie reduced to practice, and falsehood passing from words into things.  – Robert Southey, British author, 1774-1843

 

Know Your Money
Monday – December 5, 2016
Crazy Checks
By Dwight Harshaw, BBA, Personal Finance Counselor 

 

Dwight Harshaw, BBA

Dwight Harshaw, BBA

We all receive them, mailings from credit card companies that contain checks-that were not ordered or requested. I must confess that I have used one. I’ve taken advantage of a zero percent transfer fee, no interest offer-which is rare today-to pay off the balance of another credit card that I could have paid anyway. I remember it felt good initially but for months afterwards, it was a burden to pay the loan back. Fortunately I was able to pay it back within the designated time period and suffered no repercussions from using it. I was lucky. Many are not.

The marketers of debt do all they can to entice us to use their crazy checks. The checks can be used to pay off debt, make purchases, or deposit money into bank accounts. The credit card companies want to make sure that we have money to spend-up to a defined limit because they are not crazy-with strings attached. The strings or terms for using the checks are not hidden. There is a time period in which the interest charged will be zero or very low, provided that you make your payments on time. There is a transfer fee that is capped at a nominal amount. They are almost like regular checks, right? Wrong!

 

Man Holding Forehead --- Image by © Royalty-Free/Corbis

Image by © Royalty-Free/Corbis

 

Many people use the checks, experience setbacks, and their terms change. A delayed or missed payment can cause you to pay more fees and high interest. It is all there in black and white in the terms and conditions, read it.

When you receive unsolicited checks in the mail from your bank or credit card company, tear them up. Using them is almost as bad as writing a hot check. They are not money substitutes, they are loans. They are a clever way for issuers to keep you in perpetual debt. It is too easy to overextend yourself. And when you are overextended you can’t build wealth.

 

About Dwight Harshaw:  Dwight Harshaw is a personal finance counselor, realtor and writer.  He has a BBA from the University of Arkansas at Little Rock in Finance with emphasis on financial planning.

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How To Enjoy A No Spend Weekend

Donell Edwards, Blogger

DONED2014 SmallAbout 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.

 

 

To book Mr. Edwards to speak at your next event, contact:
Donell Edwards Enterprises
13111 W. Markham St.
Suite 116
Little Rock, AR 72211
DLEdwards@DonellEdwardsEnterprises.com

 

Know Your Money
Friday – November 18, 2016

How To Enjoy A No Spend Weekend
By Donell Edwards  

 

One of the purposes of this blog is to share tools and resources that we discover with our readers.

I recently came across a very good article about having a “no spend weekend” that I want to share with our readers today.

The article is entitled “Weekend Money Tip: Have A No Spend Weekend (and what I did on mine)” by Amanda from Centsibly Rich.  In this article Amanda issues a challenge to her readers not to spend any money at all over a weekend and she shares how she did it.

This is something that we strongly advocate to help control spending and to improve financial discipline.

We encourage you to read this article and to apply it in your personal money management program at least once a month.

You may get a printable copy of Amanda’s list by clicking here.

 Have A great no spend weekend.

 

Happy woman with money.

                                         Happy woman with money.

 

We Would Like To Hear From You.  Are There Any Brave Souls Out There Willing To Share?  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.

 

Follow us on Twitter for more information about personal money management
https://twitter.com/Kn0wY0urM0ney

Disclaimer:  I have a Bachelor of Business Administration degree but I am not a financial planner. However, I have acquired years of knowledge about personal money management through my life experience working through my own personal finances that allows me to share that knowledge with readers of Know Your Money. The Know Your Money Blog posts written by me are my own common sense observations and opinions and are for informational use only. Although my blog includes contributions from experienced financial professionals, please make your own financial decisions based on personal research or contact a financial adviser.

Copyright © 2016 CWR Media – All Rights Reserved

 

 

Confessions Of A Spendaholic

Donell Edwards, Blogger

Donell Edwards Publisher, Writer, Speaker

Donell Edwards
Publisher, Writer, Speaker

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
Monday – November 14, 2016
(First published March 14, 2014)

Know Your Money Special Feature:
Confessions Of A Spendaholic
By Donell Edwards

 

The MacMillan Dictionary defines spendaholic as “Somebody who is addicted to spending money.”  At one time to some extent that definition described me.  From a young age I felt deprived, although I was provided with a comfortable lifestyle and just about everything I wanted.  However, as a child, I compared what my family had with others who had more and I felt inferior.  I never discussed these feelings with anyone, and this thinking affected many of the decisions that I made in my life when I reached adulthood.

To me, being able to buy things and having lots of credit cards were symbols of success.  So many times I made purchases that I could not afford.  Needless to say, that got me into financial difficulty.  Most of the time I managed to survive without any serious problems, but eventually bad spending practices caught up with me.

While spending freely, I never considered the damage that was being done to my credit, and the resulting affect not having good credit had on employment opportunities, qualifying for a home loan or auto loan, and many other important aspects of life.

I was an angry young man because I believed that I had been denied many employment opportunities that I qualified for which had limited my income and my ability to enjoy the kind of lifestyle that I wanted.  I had developed a sense that I was entitled to more, that I deserved the things I wanted, and that when I got married and had a family that we deserved more.  So I retaliated by getting as many credit cards as I could and using them to get what I wanted and thinking that I would find a way to pay the credit card bills somehow.  I was reacting to my circumstances, which I felt were unfair, but it was the wrong reaction.

MP900149068 - Man Using ATM

I share this in hopes that anyone reading this who has similar feelings or thoughts may be helped to learn from my experience.  You see, although I was not necessarily addicted to spending, I was a spendaholic nonetheless because I knowingly spend money that I did not have by using credit cards excessively.  It wasn’t that I didn’t have a budget or that I did not understand how to budget, however, at that time my budget was based on hope rather than on reality.  Hope that I would get a better job, hope that I would be able to make more money, hope that I would be successful in business ventures that I started, and everything would be alright.  At the same time I was mad because I was in this situation and I felt life was unfair and I was reacting to my circumstances.  Whatever my reasons, they were wrong.

As I embarked down this road to financial self-destruction I was in denial and rejected the good advice I received from family and friends who tried to help me.  I would tell them, “You just don’t understand.”  Eventually I lost everything and had to work to reestablish my credit and rebuild my life.  All because of being a spendaholic.

Those experience in life taught me valuable lessons that I will never forget, and that I hope will allow me to help others by sharing the knowledge that I gained from having those experiences.  I know that spending can be addictive, but anyone who really wants to can overcome the addiction.  Just don’t let it destroy you before you take action.

Brave Souls Wanted:
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.

Helpful Videos:

Buying vs Renting A House:  The Advantages of Each

Teaching Kids About Money

 

Follow us on Twitter for more information about personal money management
https://twitter.com/Kn0wY0urM0ney

Copyright © 2016 CWR Media – All Rights Reserved

 

 

Check Your Credit Report

Guest Contributor – Tara Goodfellow, MBA

Tara Goodfellow, MBA, Owner Athena Educational Consultants, Inc.

Tara Goodfellow, MBA, Owner Athena Educational Consultants, Inc.

Mrs. Tara Goodfellow owns Athena Educational Consultants, Inc. a career consulting company that provides individual career related services such as professional cover letters and resumes, interviewing skills & mock interviews, networking & job search strategies, and career assessments.

 

 

 

 

 

 

Know Your Money
Monday – November 14, 2016
(First published September 15, 2014)

Check Your Credit Report
By Guest Contributor Tara Goodfellow, MBA, Owner Athena Educational Consultants, Inc.

 

Take advantage of your right to order a credit report one time per twelve months from each of the three national credit agencies: Equifax, TransUnion and Experian.  To obtain the truly free reports, be sure to use Credit Karma   or annualcreditreport.com.  There are several other websites that state it’s free, but there are typically strings attached.  You can get your free credit report and helpful credit information at Credit Karma.  You may also log on to annualcreditreport.com, select your state from the drop down menu, and provide detailed and personal information, and select from which credit agency you’d like your report.

Working in Office Cubicle

When is a credit report used?

Typically, when you apply for credit, your credit report will be ordered and reviewed. In summary, this tells the potential lender your level of risk.  This is usually reviewed when you apply for a car loan, a cell phone, or a retail credit card to name a few. If you are not familiar with what is on it, you may be getting denied for reasons that aren’t accurate.

What can I expect to find on my credit report?

A credit report is basically detailed credit history. It lists your bill payment and loan repayment history, the amount of credit you have available, your monthly debts, late bill payments, and other types of related information. The information helps  lenders determine whether you are a good or bad credit risk.

How does my credit report differ from my credit score?

A credit score is one number that ranges from 300-850.  The most widely used model is based on a mathematical model created by Fair, Isaac and Company, and referred to as your FICO score. It basically ranks your credit risk. The number is based on a formula that analyzes your credit file information showing your payment history. It’s a tool used by lenders to decide whether a person qualifies for a particular credit card, loan, or service. Basically, how risky will it be for them to lend you money or credit? What is the probability you’ll repay what’s owed to them over time?  In general, the higher the score, the less risk.

Should I just order all three reports at once?

You can, and this might make sense if there’s a reason you want to compare all three.  However, if you decide to space it out a bit, you can make note of any changes without having to wait a full twelve months to notice additional or changed information.  Let’s say you order one today.  Go ahead and make a note of the date four months from now, and order from one of the other two agencies, and proceed with that pattern.

What if I find something that’s incorrect?

The process is pretty simple. If you believe something isn’t correct, notify the agency directly.  These options are available on each of the three main websites for TransUnion, Equifax, and Experian.  Literally, the agencies make billions of updates monthly, so it is important to review each detail on your report and let them know immediately if something needs to be reviewed. You’ll be notified typically within 30-45 days with an update.  Or, if you dispute online, you can check your dispute status electronically.

I need to improve my credit report, should I respond to one of the emails I receive about promising to improve my score?

The short answer, NO. There’s a really good chance either you’re going to be charged a great deal of money to have an “expert” company do what can be done for free, and/or the company is not reputable.  If you do need help with your credit score, contact a nonprofit agency.  One listed on Equifax’s website is Money Management International (MMI).

Since I don’t have much credit, I heard I should open lots of credit card accounts.  Is this true?
It’s sometimes advised if you don’t have an extensive credit history, to open a FEW new accounts to establish credit. However, the keys to this are to pay them off on time.  Do not open accounts just for the sake of having accounts, and if you’re not responsible with funds, this can backfire terribly.  Even your student loans can help establish credit if paid on a timely manner.

Want to stop getting all of those “you’ve been pre-approved” offers?
Contact 1-888-5OPTOUT

Additional resources:
http://ftc.gov/bcp/menus/consumer/credit.shtm

Copyright © 2016 CWR Media – All Rights Reserved

Can You Live Without It?

Guest Contributor Lionel Shipman

Lionel Shipman Owner - Shipman Consulting

Lionel Shipman is the owner of Shipman Consulting, a personal and business finance-consulting firm specializing in helping individuals and businesses improve their financial outlooks. The primary focus of the firm is facilitating seminars and classes to educate, motivate, and empower people to take charge of their financial lives. The firm also offers one-on-one consulting services.

Please visit the firm’s website for information at  WWW.ShipmanConsulting.Com.

Email address: Contact@ShipmanConsulting.Com ; Twitter: @LShipmanSC

 

Know Your Money
Monday – November 14, 2016
(First  published September 17, 2014)

Can You Live Without It?
By Guest Contributor – Lionel Shipman

 

Can you recall some old love songs that included the words “I can’t live without you”?  The song talked about living everyday with that special person and the consequences of living without them.  Well, you can live without that special person, even though you may not want to.  It may be a huge adjustment but you can do it.

Can you recall a day when you were walking in your favorite department store desiring a certain pair of shoes?  As you casually decided to try on the shoes and take a stroll in them, you noticed that the shoes felt wonderful to your feet and the price was not bad. With the biggest smile, you looked at everyone around you as well as the sales attendant and said “I’ve got to have these shoes.  I cannot live without them”.

Well, that is the mentality that many people have regarding their spending.  It is the “I cannot live without it” mentality. Instead of people working toward getting their financial houses in order, they are casually spending on things they cannot afford or even need.  If there has ever been a time to spend carefully and manage your money, the time is now. 

I am not trying to promote fear; rather, I am aiming to instill sound financial judgment into the hearts and minds of people, especially when it comes to spending.  It reminds me of the biblical parable regarding the man who built his house on sand as opposed to rock.  When the storms came, the house built on sand crumbled and washed away; whereas, the man who used rock as the foundation, his house withstood the effects of the storm and remained intact. Well, many consumers’ financial outlooks are not only crumbling but are being washed away because of the “I can’t live without it” mentality.

Can't Live Without It!!!

Can’t Live Without It!!!

Check this out. Without using any names, I recall a couple of years ago a person discussing with me that paying off debt was going to be their main goal for the year. However, every month this person was spending and making unnecessary purchases such as dining at expensive restaurants and buying sporting gear, at the same time trying to justify their spending spree. This person’s actions implied that they just could not live without it.  Who cared that the charges were paid by credit card and were not paid off by the end of the month the charges were made?

Here is another example. My wife and I met a couple that ventured on a cruise vacation even though their home mortgage was in the beginning stages of foreclosure.  Granted, I believe taking a vacation is important.  However, when the mortgage or rent payment is due, a vacation can be postpone to a later date or one can consider taking a modified vacation by placing a beach towel on the floor, getting some snacks and a mixed drink, and enjoying a television marathon of vacation hotspots on the Travel Channel.  I know that sounds humorous.  But, what is the alternative?  Keep spending because you deserve it (new shoes, clothes, car, expensive vacation, etc.)?  Keep spending because everyone else is doing it?  Keep spending because it makes you feel good?  Keep spending because you have worked hard all year long?  Can you live without it?  Yes, you can live without it.

During my personal financial seminars, I always stress that everyone should enjoy life to the fullest.   However, we must control our spending and remove the “I can’t live without it” mentality.  Regardless of the discounts, rebates and percent-off offers, we (consumers) should not allow the “it” to control how we allocate and spend money.  Consumers should remind themselves that the “it” will no doubt be there when they are in a better financial position to afford it.  Don’t worry, the great sale in the department store will most likely happen again.

The “I can’t live without it” mentality reminds me of the cliché “keeping up with the Jones’.  When a neighbor or friend decides to purchase a new house or car, why do we feel pressured or obligated to do the same or better?  Why do we strive to live like our favorite entertainer or sports figure, knowing that our incomes are nowhere near theirs?

If consumers continue spending carelessly and allow the “I can’t live without it” mentality to lead their financial lives, they will be placed in a position where they will have no choice but to live without it.

© Copyright CWR Media, 2016.   All rights reserved.

Knowing Your Personal Finances: What Happens When The Budget Comes Under Attack?

Donell Edwards, Blogger

Donell Edwards Publisher, Writer, Speaker

Donell Edwards
Publisher, Writer, Speaker

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
Monday – November 14, 2016
(First published March 11, 2014)

What Happens When The Budget Comes Under Attack?
By Donell Edwards

Before getting into today’s post I want to acknowledge that there is a diverse group of readers of our Know Your Money Blog.  Some have the financial acumen to be very successful in managing their money and read our blog merely because it interests them.  Others, although affluent, understand that the cliché, knowledge is power, is more than just a cliché, there is a great deal of truth in those words.  So they seek as much knowledge and information as they can get to be well informed on how to improve their financial skills.  Then there are those who are on a financial level where they feel stuck and would like to improve their financial situation.  And then there are others who are in real trouble financially and who are struggling just to get by from day-to-day.

I would like to say to those in the latter group, those who are struggling to get by, that I understand.  I can fully relate.  I know that if you have read our posts in the past there were probably times when you said this is meaningless to me because I don’t know how I will be able to get by from one day to another.  So how on earth am I supposed to have a budget?  I stay constantly behind on practically everything.  It is all that I can do to pay the mortgage or rent and the utilities.  Every day I drive an automobile that I hope will not quit before I go all the places I need to go.  I have to scrounge to find gas money.  And I am in almost constant fear of the consequences of an accident because I can’t afford auto insurance.  There are even times when there is not enough food in the household.  When I get a bill paid it seems like it is due again the instant it gets paid.  I am very fearful of the consequences of anyone in the family getting sick because I don’t know what I would do.  We are too poor to die, I would not be able to bury my deceased loved ones.  But some might reason, aren’t there social programs to help people with these kinds of needs.  Yes, but many people, while not having enough income for a normal life, exceed the income requirements for public assistance.  They are on their own.  I know.  I have been there.  I have experienced  some of the same things myself.

I know that for some reading this, you may have a very difficult time understanding how anyone could get into this situation.  If you have not experienced it yourself and you have had a fairly easy ride, you probably cannot imagine anyone being in such a dire situation.  Nonetheless, this is the reality for many people.  That is why it is so important to me to try to offer the help my neighbors in this condition need by sharing my experiences and knowledge through the information in our blog.

Today’s blog post is about what to do when the budget comes under attack.  That is why I wanted to acknowledge those who feel that a budget is not practical under their circumstances before embarking on today’s post, and to emphasize that everyone needs a budget.  We will discuss how to prepare a budget under distress in another post.  That being said, regardless of what financial level you are on, what can you do when the budget comes under attack?  When you have prepared a realistic budget and the unexpected happens, how can you effectively respond?

Young Man with His Hand on His Forehead

First of all, let us consider some of the areas in which the budget may come under attack:

Work Related

  • Demotion
  • Layoff
  • Downsizing
  • Reduction in hours
  • Termination

Family Matters

  • Marriage
  • Birth of a child
  • Divorce
  • Death of a mate
  • Caring for ageing parents

Health Issues

  • Illness
  • Disease
  • Injury
  • Long-term illness
  • Surgery
  • Disability

Miscellaneous

  • Theft
  • Fire
  • Auto accident
  • Everything else

It is very easy to become complacent when things are going well and the budget works the way we planned, but when any of the events listed above occur unexpectedly, or other things happen that attack the budget, we must always have a backup plan.  The best backup plan is an emergency fund, however, as we have previously stated numerous times, this is a process, and we have not gotten that far along in the process yet.  The emergency fund is something that we will discuss in the future.

However, where we are now in the process is evaluating and monitoring spending, developing a realistic, workable budget, and adhering rigidly to that budget.  So after having accomplished those tasks at this point in the process, when there is no emergency fund, how do we handle the attack on the budget?

First of all, it must be determined if the factors affecting the budget are long-term or short-term and plan to adjust the budget accordingly.  A short-term impact of only a few weeks or a few months is far different than an impact of a year or longer.  Whatever the situation, we must determine how to adjust the budget to allow for the additional expenses incurred as a result of the event or events that have occurred.  This means reducing payments where possible, eliminating items that can be eliminated, and contacting creditors and explaining the changed financial circumstances and where possible negotiating more affordable payment terms.  That is why it is so important to always pay bills, pay them on time, or early if possible, and to always try to pay more than the minimum amount due.  It is much more likely that a creditor will work with you in a crisis if you have established a good payment history and have developed a good relationship with them.

So, adjusting the budget is the first step.  If adjusting the budget does not eliminate the problem then other measures are necessary.  You will have to determine what measures will work best for you, but be prepared to make sacrifices.  It may be necessary to take a second job for a time.  If you own any valuables and the unexpected expense may be eliminated by selling valuables, that is an option.  For example, if you have jewelry, antiques, collectables, stocks, etc. that would bring in enough to pay the expense that is an option.

For those who do not have valuables that can be sold or assets that may be liquidated, finding items in the budget with the highest payment amounts that can be eliminated is another option.  Remember, depending on the amount of the expense and the length, it may be necessary to make some very undesirable sacrifices.  For instance, if you have a high vehicle payment and public transportation is available, an option for you may be to place an ad in the newspaper or online for someone to take over the payments on your vehicle.  Or if you lease your home or apartment, consider moving to a home or apartment that is less expensive if the expense incurred is of a significant enough amount and for a long enough period of time.  These are very drastic measures, but they may be very necessary to get back on track with the budget.

Start today working on your backup plan; don’t wait for a crisis to happen.  Consider what you would do if some of the things listed above happened to you, consider how your budget would be affected, what measures you would need to take in order to adjust your budget.  Although the emergency fund is later in the process, if you are on a course with your budget where you have or will have money left over each month, save as much as you can.  That will definitely help in the case of unexpected events that attack your budget.

We welcome your comments and suggestions on how to overcome unexpected expenses that strain the budget.   Just submit your comments at the end of this post.

Be sure to come back tomorrow for guest contributor Felicia Johnson and her post, “Making Change.”

Today’s Extra

By the way, I found the following video very interesting.  It discusses the negative affects of materialism on life and society.  This is very relevant to our discussion on money management and spending, because too often one of the root causes of poor money management is a materialistic lifestyle.  What is materialism?  The Merriam-Webster dictionary defines materialism as, “a preoccupation with or stress upon material rather than intellectual or spiritual things.”  The video really should cause each of us to pause and consider how we are living our lives.  I hope you enjoy it.

Are You A Spendaholic?  Share Your Experience

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:

The High Price of Materialism
http://www.moneysmartguides.com/the-high-price-of-materialism

Four Steps to Making Budgeting Easier for Anyone
http://blog.credit.com/2014/03/steps-to-make-budgeting-easier-for-anyone-77560/ 

 

Follow us on Twitter for more information about personal money management
https://twitter.com/Kn0wY0urM0ney

Copyright © 2016 CWR Media – All Rights Reserved

The Seven Enemies Of Change

Donell Edwards, Blogger

DONED2014 SmallAbout 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
Monday – November 14, 2016
(First published May 27, 2014)

Knowing Your Personal Finances
The Seven Enemies of Change
By Donell Edwards

 

Today’s topic is the seven enemies of change.  For most readers of this blog who are genuinely interested in improving their personal money management skills, it will be necessary to make some changes in your life and habits.  We have mentioned this before and have repeated the necessity to make changes because it is so important to understand that deeply ingrained habits that were learned over a number of years, or perhaps a lifetime, are not easily changed.  One of the major problems for many people is the lack of the willingness to change.  There may be a number of reasons for a person having this attitude.  Because change is not easy.  So today, we will discuss seven of the enemies of change.  These are by no means all of the enemies of change, but these are seven that we feel are of particular importance.

Doubt – Some have doubts about their ability to make changes.  They have grown so accustomed to managing their financial affairs a certain way for so long, they do not feel that they can make any changes.  Or, they doubt that making changes will be beneficial.  So, doubt prevents them from having the willingness to change, or to see any advantages in making changes.

Fear – A powerful enemy of change is fear.  Fear is much stronger than doubt and is much more difficult to overcome.  One of the greatest fears many have is the fear of losing control.  When it comes to managing personal finances, it may be necessary to relinquish some control to a mate, a relative, or a professional counselor or adviser. This is a scary scenario for some to contemplate.   Then, there is the fear of change itself.  Most people are comfortable with their own way of doing things and fear the impact that changes may have on their life.  They fear the sacrifices they may have to make.  They fear the effect it may have on lifestyle and relationships.  So, fear not only prevents them from having the willingness to change, it prevents them from making changes.

Weakness – It takes a lot of inner strength to make changes.  When it comes to managing money some are weak when it comes to resisting the temptation to buy things they don’t need, they are too weak to make the sacrifices they must make in order to live within their budget,  they are too weak to implement any changes in life that require willpower and determination.  So, weakness prevents them from making changes, or if they attempt to make changes, weakness prevents them from following through on their decision to change.  

Laziness – Making changes requires great effort.  When it comes to managing money it takes effort to monitor and control spending.  It takes effort to develop a realistic budget and to follow it rigidly.  It takes effort to resist temptation, to make sacrifices, and to communicate with others who may be involved or affected by personal money management decisions.  Some people just do not want to take the time and energy to take control of their personal money management, so they allow laziness to prevent them from making beneficial changes.

Jump Through Hoop --- Image by © Royalty-Free/Corbis

Jump Through Hoop — Image by © Royalty-Free/Corbis

Denial –  Alcoholics will tell you that they do not have a drinking problem.  In spite of all of the evidence, they will vehemently deny that they have a problem.  Some who live from paycheck-to-paycheck tell themselves that if they can just make it one more paycheck, or one more month, they will be able to get over the proverbial hump.  But it seldom happens.  Bills go unpaid, or get paid late, ultimately resulting in some bills going into collection.  In spite of all of the evidence, many people in this situation are in denial.  They cannot accept the fact that they need to make changes in the manner in which they manage their money, they need help.  Denial is one of the most powerful of all enemies to change.

Delusion – Delusion and denial are closely related enemies of change.  Whereas denial is the refusal to accept the obvious facts, delusion is usually the catalyst that causes the denial; it is a false belief or manner of thinking that a person deceives themselves into believing is truth.  So, a person is deluded into denying the reality of their situation, and thus has an aversion to change.

Complacency – As creatures of habit it is a lot easier to remain in our comfort zone and be content with the status quo, rather than to embrace change, even beneficial change.  This complacent attitude is another one of the enemies of change.  Again, some delude themselves into thinking that everything is just fine the way it is, and they ignore warning signs that finances are getting out of control, or that they are already in trouble with the way they are managing their personal finances.  They see no need for change.   

So avoid these seven enemies of change, as well as all other enemies of change, because change is essential to your success in managing your personal finances and in all aspects of life.

Behavioral change is very difficult, so in today’s Must Reads we present a series of very short articles on behavior change written by Kendra Cherry, who is a licensed psychologist and also the psychology expert at about.com.  In her articles Dr. Cherry discusses how to get started in making behavioral changes, the essentials of change, and the different stages of change.  I highly recommend that you read these articles to help you recognize and defeat the enemies of change. 

 

Must Reads:

Behavior Change:  Getting Started

The Elements of Change

Stage 1 – Precontemplation

Stage 2 – Contemplation

Stage 3 – Preparation

Stage 4 – Action

Stage 5 – Maintenance

Stage 6 – Relapse

 

 

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We Would Like To Hear From You.  Are There Any Brave Souls Out There Willing To Share?
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.

 

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Disclaimer:  I have a Bachelor of Business Administration degree but I am not a financial adviser. However, I have acquired years of knowledge about personal money management through my life experience working through my own personal finances that allows me to share that knowledge with readers of Know Your Money. The Know Your Money Blog posts written by me are my own common sense observations and opinions and are for informational use only. Although my blog includes contributions from experienced financial professionals, please make your own financial decisions based on personal research or contact a financial adviser.

 

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