America. It’s the land of wealth and prosperity, right? Maybe, but there are some other less desirable characteristics in the good ol’ U.S. of A. Americans have pitiful savings rates and lots of debt. The numbers tell the story: more than a trillion dollars of student loan debt, with credit card debt closely following, and savings rates consistently hovering around 5%.
Maybe your financial foundation is shaky, but how can it be fixed? Take a look in the mirror. It could be as easy as determining whether you’re part of the problem or the solution.
Let’s examine a few mental stumbling blocks to financial success. Maybe you’ll see a little of yourself in these attitudes; I know I did. And, it’s like that old saying, “Knowing you have a problem is half the battle.” If you understand how your mindset may be sabotaging your future, you can try to change it.
Mr. (or Miss) Independent
Becoming self-reliant is a revered rite of passage — until it hinders you from getting the help or advice you need. As a freshman at West Point, I remember when a buddy told me about the big returns he earned on some investment. I scoffed in disbelief. I hadn’t heard of what he was talking about, so I assumed it couldn’t be more than a fantasy. Soon after, I learned that mutual funds were real and not all that newfangled. Sometimes we don’t know what we don’t know, and we definitely need to be open to new ideas and helping hands.
It’s All About Me
“We deserve it.” Now replace “it” with a new car, a tropical vacation or that high-definition TV you’ve been eyeing. I know I’ve told my wife these exact words to justify a decision or purchase with big financial implications. Sometimes we do deserve to treat ourselves, but we also have to face the consequences if our rewards are things we can’t really afford.
Avoiding The Problem
Most of the time, bad news is not going to just resolve itself. Does your credit card debt seem too daunting to face? Are you behind on some payments? Or not saving enough for retirement? Time, without action, generally just makes things worse. Don’t bury your head in the sand. Take action, even a small first step, to improve your financial future now.
It’s The New Normal
In its 2016 Retirement Confidence Survey, the Employee Benefit Research institute reported that 54% of Americans have less than $25,000 socked away for retirement. But just because everyone’s doing it — or not doing it — doesn’t make it right. Buck the trend. Don’t wait until you’re too far behind to catch up on your retirement savings.
Let’s Jump In
Being impulsive can negatively affect everything from the management of your portfolio to your shopping decisions. Have you ever made a spur-of-the-moment decision only to look back and wonder, “What the heck was I thinking?” I’m remembering a trip to Orlando and a certain time share — thank goodness for the rescission period! Have some patience, do your homework and look before you leap.
Enjoying The Now
We’ve all heard it: “You only live once.” But is that outlook throwing a wrench in your financial gears? It certainly could be if getting what you want today is keeping you from doing what you need to do for tomorrow. Setting aside money and having a plan for your future is crucial, especially if you’re like me and want to have the financial capacity to do a little YOLOing when you get there. Make sure you’re balancing your zest for life with a little prudence.
Do any of these attitudes sound familiar? If you recognize your own stumbling blocks here, the battle is half won. Choose one problem area to tackle. Maybe bring up the subject on your next financial date night. (You’re doing those, right?) Figure out how your mindset is affecting your bottom line and decide what you can do to fix it. Then just do it.
