Working Your Plan: Step Five to Fixing Family Financial Problems

When it comes to identifying and addressing family financial problems, there are many hurdles to overcome. Countless couples have great intentions but fizzle out at various stages of the process when they encounter difficulties. Some partners have problems initiating the process. Others get started, but soon become overwhelmed by their situation and quickly regress into their undisciplined financial habits. Others still go through the entire progression of tracking, organizing, analyzing and planning their spending, but later get disrupted when faced with unforeseen challenges. These challenges are not always financial in nature. They are often psychological or motivational barriers.

If you are serious about making your spending plan work you need to have more than information and understanding of financial matters. It is very important for you and your spouse to educate yourselves and become more competent in this area. But, this alone will not be enough translate into a better financial future. Knowledge is important, but attitude is critical. No matter how much you learn about sound financial practices, you will never make any meaningful headway until your mindset changes to match your knowledge. Several sources say that fixing family financial problems is only about 20% knowledge and 80% attitude.

Here are some common motivational challenges that you may face as you work your spending plan on the path to financial independence.

(1) Impatience. Stabilizing spending, eliminating debt, and investing in your financial future takes time. It is a marathon, not a sprint. When you make sacrifices but the progress seems slow it is easy to feel defeated and want to give up. In nearly all cases family financial problems will take much longer fix than they did to develop. Just a few months of bad decisions or income shortfalls may take years to undo. But think of it this way – what is the alternative?

(2) Discouragement. Often you will encounter setbacks along the way. You may work hard to save up a little money only to see it depleted in just a few days by an unplanned need. Or, other unforeseen circumstances outside of your control – such as the loss of income, unexpected bills or charges, etc – may make you feel like throwing in the towel. You may even mess up and impulsively overspend at times. But don’t give up. Setbacks are a part of life. Other people have made it. You can make it too.

(3) Rigidity. Another factor that can deflate your motivation is your own inflexibility in your spending habits. Some become slaves to their budgets instead of using it as a tool to make their life better. That is a mistake. Don’t get caught up in a legalistic spending plan. Learn to be realistic, practical and even flexible when necessary. When the budget doesn’t balance the way you like, keep working on it until you have developed something that not only meets your financial goals, but is also something you can live with. Being strict with a budget can be a good thing. But not if you are so rigid that you cannot live with it and end up packing it in.

(4) Overcorrection. When the bottom line gets tight it often seems like the only option is to significantly reduce or eliminate flexible spending categories. However, not all categories are expendable. You need to eat, have clothing, and even enjoy entertainment from time to time. Yet these are often some of the first areas targeted in an attempt to correct other areas. Find and fix the real problems instead of depriving yourself and your family through overcorrection.

(5) Temptation. There will be times when you are tempted to make impulse purchases or otherwise spend irresponsibly. Vacation opportunities, big sales, financing offers, and other circumstances will never cease to avail themselves to you. There is certainly nothing wrong with doing something nice for yourself and your family, rewarding yourself, celebrating, having nice things, and so forth. But, when such things jeopardize your financial future it is not worth it. They key for all spending is to plan for it. Don’t go into debt for a vacation, save and plan for it. If there is an important item you need, save for it and research to get the best deal. You must develop discipline in your spending or all that you have worked for can vanish quickly.

Articles in this series...

--- Introduction
(1) Track all spending daily for a month
(2) Organize spending into meaningful categories
(3) Analyze your spending
(4) Establish a spending plan (budget)
(5) Work your plan
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