Fault and responsibility are not the same thing.
It is counter-productive to try to find fault for a person’s financial situation. With my clients, I definitely have a “No Shame – No Blame” policy.
However, if there is going to be change it is essential that we take responsibility for where we are. If we look around at people from similar circumstances, we will find some have failed and some have succeeded. Our responsibility is to analyze both and choose our actions with intentions.
Most of us get into financial trouble not because we made terrible choices, but because we failed to make good choices over and over again. Overspending by a little bit here and there, failing to save or having no plan eventually catches up with us.
The early symptoms of “death by a thousand cuts” are:
- Carrying balances on credit cards that you used to pay off every month
- Credit cards or Equity line balances that are creeping up
- An inability to name what you spent the money on
- NSF Charges or paying bills late
- Failing to contribute to retirement
- Having no emergency fund or failing to rebuild a fund after an emergency
Will our good decisions always lead to success? No, unfortunately they will not.
This presents a challenge to our irrational thinking. Once we start trying to make intelligent choices with our money, we want to believe that financial hardship is behind us, that only people making “dumb” decisions incur financial pain. Conversely, we want to believe that all financial successes come from smart choices. Neither is true and when you stop and think, you know it.
Bad things happen to people who are doing the right thing. They lose their jobs, their parents get ill, and their retirement funds lose value in a down market. And, occasionally, people engaging in very risky (day trading, zero down house flipping) financial behavior win.
Overall, consistent, informed, intentional decision-making will greatly improve our chances at financial success. In addition to improving our day-to-day lives, this pattern of intention will soften the blows of the inevitable hardships that we will encounter.