It seems like we have evolved into a society that no longer believes in personal accountability. You see this trend often with regards to personal finance where an individual can lay blame to numerous outside factors that have caused the problems they are experiencing. Truth be told in most cases the blame lies squarely on the shoulders of the person pointing their finger. There are of course outside factors that can contribute to financial instability such as a major illness, divorce or the loss of employment. If you find that you consistently struggle with money management and you are not experiencing any “extreme” conditions which could be contributing to the problem you might want to review the following behaviors or personality traits that can spell disaster for your personal finances.
The Big Spender- This person finds it almost impossible to not spend money. In fact the big spender often buys things just for the sake of buying things with no real need for the product or service they are purchasing. While the big spender enjoys making purchases they often pay for things for their family and friends offering to pick up the tab for dinner or buying gifts for no particular reason. In reality there are few people with such an excess of disposable income that they can afford shopping indiscriminately without keeping track of their spending. Most big spenders do not know or choose to deny how much debt they really have, if you were to ask them about how much money they owe they will likely think it is much less than the actual amount.
The Happy Go Lucky Investor- This person makes critical investment decisions based on tips from friends, relatives or co-workers without any careful research or the guidance of a investment professional. The happy go lucky investor often acts on “hot tips” making impulsive purchases or a quick sale as the result of bad news. Investments should be part of a long term strategy and based on well researched fact versus a fly by the seat of your pants attitude. It is important to educate yourself as much as possible on the process however most people do not posses the financial education or experience to completely go it alone, making the advice of an experienced professional financial advisor beneficial in reaching your long term goals.
The Procrastinator- This person habitually puts off paying bills and other financial tasks either due to lack of organizational skills or the inability to properly manage finance in a timely manner. Beyond suffering late payment fees and other penalties this person can expect to see their credit score suffer due to ignoring bill statements and other time sensitive decisions. The best way for the procrastinator to break the cycle is to find a system that works for them. This may include automating their payments (paying special attention to note deductions in their checkbook) or simply setting aside specific days in which you go through your mail to organize and pay your bills. Since many bills such as utilities and credit card payments are due roughly the same time each month you should not have to wait to receive the billing statement to budget a payment.
The Optimist/Pessimist– The optimist sees the glass half full and the pessimist sees the glass half empty. When it comes to managing your finances you must be able to look at the reality of your financial situation and make decisions accordingly. The optimist prefers not to think about the unpleasant realities in life and may avoid preparing a will, getting life insurance or other tasks that require looking into the future and preparing for all possibilities. The optimist also believes everything will work out in the end behaving in a way that doesn’t include planning for life’s unexpected twists and turns. On the other hand you have the pessimist who is completely convinced that regardless of what he or she does that they will never get ahead. The pessimist may remain distant from the realities of day to day finances and go through each day believing that making financial goals is useless since no one ever achieves them anyway.
There are many more personality traits that can contribute to failing to meet your financial goals. If you recognize any of these traits or realize that your own behavior may have a role in your financial situation it is important to realize that it is never too late to change. You may not have control over external factors going on in the economy but you should certainly work toward changing your own self destructive behavior to ensure financial stability in the future.