Recently, Daisy Luther ("The Organic Prepper") wrote a piece entitled "Seven Lies People with Money Problems Tell Themselves."
She distinguishes between those who are just in a rough patch (hey, it happens to everyone) and those who are perpetually in a downward financial spiral. It's the "downward spiral" people she's addressing. "These lies are very common, and they can keep you trapped in a bad situation for a very long time," she writes.
She lists the seven lies as follows:
• It's not my fault. ("Taking personal responsibility for your mistakes is the first step
toward setting things right. Nearly every financial situation could have
been different if a different series of decisions had been made.")
• It's just this once. ("Whether you’re buying something frivolous on your credit card, going out
to dinner because you don’t feel like cooking, or take some other
shortcut, it’s really never 'just this once.'")
• My children shouldn't know we're having money problems. ("You need to consider that living in a glowing perfect world where every
bill payment is met with ease and budgets don’t seem to exist – things
just magically work out – that’s a fairy tale. And if they grow up
believing in that fairy tale, you are setting them up for a life of
difficulty.")
• Paying off debt is always the most important thing. ("If you are in a bad situation financially, there are lots of things you
should be paying before you exceed the minimum payment on your debts.")
• You have to have a credit card to get by in this world. ("It’s far from a necessity, especially if you have a debit card with the Mastercard or Visa logo on it.")
• I deserve a treat. ("This is one of the most dangerous financial lies out there. If you
believe that budget be d*mned, you have had a bad day and you deserve
that treat regardless, you’re treading into dangerous territory.")
• Money doesn't buy happiness. ("Money makes your life easier, more comfortable, and less stressful. And
while that isn’t a recipe for joy, it sure does help make room in your
life for seeking those things that make you truly happy.")
(Deeper explanations for each point can be found in the article.)
While Daisy makes exceptions for things that are out of one's control – such as catastrophic illness or injury – in other respects she puts financial hardship squarely in the laps of individuals. To be fair, it sounds like she knows what she's talking about. In her past, she's hit periods of economic rock-bottom, including losing her home to foreclosure, losing her car to repossession, and dumpster diving to feed her kids.
Daisy emphasizes changing one's mindset as an aid toward climbing out of the pit of economic instability. Certainly it's a tool in the toolbox.
But has she gone too far? Are those experiencing economic difficulties largely to blame themselves? What are your thoughts?
While bad luck can and will drop into everybody's life.
ReplyDeleteThe vast majority of my own financial issues when I am self-honest comes from MY Decisions.
I more than once had to choose to work extra jobs and eat a lot of Mac and Cheese to pay off debts and get back to a debt free lifestyle.
I use credit but I pay all of it off before credit charges are incurred. I actually get some real benefit from the 2% back.
Bad luck happens. Children blame others, Responsible Adults PLAN for awe-*hits and set aside funds, supplies (like a birthing kit for the calves in trouble) and carry on.
Proverbs 30: 7 “Two things I ask of you, Lord;
do not refuse me before I die:
8 Keep falsehood and lies far from me;
give me neither poverty nor riches,
but give me only my daily bread.
9 Otherwise, I may have too much and disown you
and say, ‘Who is the Lord?’
Or I may become poor and steal,
and so dishonor the name of my God.
I'll endorse every one of Daisy's points. my ex wife used every one of these lies/excuses to bankrupt "us" twice before our divorce. she continued her life of financial hardship and finally died homeless, penniless, and eft a large debt to her kids. I stopped lieing about my finances/debt and am now comfortably retired in a paid off house, with a two paid off cars, and ample savings to live out my life without worry or stress.
ReplyDeleteLife can screw up even the best planning. A divorce out of the blue, the birth of a special needs infant (my good friend had to stop working to care for him as there was no other way, which messed up her plans), a house fire, etc etc. Obviously people do make mistakes with their money. Also, there can be a feeling among working class people that nothing is ever going to get better, so live for today. (This was rife in my wider family of origin.)
ReplyDeleteI don't think you can make a broad generalization about individual situations. For example, saying a person doesn't need a credit card might be correct for someone older and more established, but good luck getting your first apartment these days if you don't have a credit history, which is hard to get without some kind of card or debt payment. There are so many personal factors that evolve over time and they all contribute in to a person's circumstances and financial needs. Not to mention the larger economic factors of higher costs of living without commensurate wage increases that affect us all. Putting all the blame on the person struggling is unfair and serves only to increase the attitude of 'poor = bad person' that feels so prevalent these days. Never forget that 'pulling yourself up by your own bootstraps' started as a statement to indicate something physically impossible!
ReplyDeleteYes. Recently I had a financial advisor flummoxed. "You don't have a credit card?" Nope. "You don't have a car loan?" Nope. "You don't have a mortgage?" Nope. But then I'm 60 so blah blah blah. I was reading an article in the Wall Street Journal a day or so ago about people who couldn't retire because of their compounding student loans. I will admit I tsked loudly then because....compounding is basic math and you need to pay off loans you took out. A friend of a friend graduated from Cornell in 1979 and his student loans are inching to a million bucks. Meanwhile he drives an Uber. Sigh.
DeleteCredit cards are not the same credit, such as paying your bills on time. Self sacrifice such as paying your bills on time and not taking loans for luxuries such as eating out and pay television will put you in a better place. Praying first and foremost will also help curb your financial urges.
DeleteWhen we moved to Texas we could not get credit. The only loan I had ever taken out was for a car which I paid off. We could get a bank card that was usable in 4 stores in town with a $500 limit. After about 6 months of using it when we could and paying it off in full every month we were given a regular visa that was usable everywhere. We charged what we could for another 6 mo. and then were able to get our limit raised to $2000. In all the years since I have only carried a balance one time when we were building our retirement home and purchased all of the appliances on the card. That was paid off by the second month. It is just too easy to get in trouble if you do not have this mindset.
ReplyDeleteMoney may not buy happiness but it gives you the power to buy the things that do.
ReplyDeleteCook at home, drive an older car than doesn't have turbo or electrical sensors everywhere on it that you can fix at home or locally, NOT at the dealership. Buy on sale. Don't fear second hand shops, just throw it in the wash. Learn how to fix, sew, maintain, and improve with your own hands. Choose the simple things, not the experience. Reward yourself once in awhile. Choose friends wisely. Look for things to be thankful for. Have faith in the Lord. Learn to be content.
ReplyDeleteIf you’re in financial difficulty, look for a plan to get out that works. Submit to your plan and stick with it. Stop borrowing from Peter to pay Paul.
ReplyDeleteYes every situation is different. But it all boils down to making good choices. Learn from others mistakes, which means if what they do doesn’t work, DON’T DO THAT!
Read Proverbs a few dozen times. Lots of good advice there.
If you signed it, you owe it. Pay it.
Sometimes it really isn't a person's fault. The vast majority of the time it is a person's bad decisions, but there are numerous situations in life that can lead to financial problems that people never expected. A common thing right now is happening in parts of Idaho, where the wages are staying the same, but everything is skyrocketing and people just cannot pay their bills. Rent in my area has tripled to quadrupled in the past 5 years, and home prices have went from an average of $125-150k to around $450k for the same size house. While the wages have stayed the same for years, wages briefly went up during covid, but since then mainly places have actually dropped their wages and people are now making less then they did just a couple years ago. Property taxes have skyrocketed, energy prices are massively going up, fuel costs have gone up, food costs have gone, but wages are staying the same or decreasing. Many people have had to go into debt to just survive. And I've seen many people say well they can move to another area then, well it's not that simple if you already don't have money. Many people don't have family members they can live with, and are just becoming homeless or living in RVs living in parks and parking lots. Combine that with any sort of medical bill or other unexpected expense and you are just screwed. But I will say that over the years I have seen numerous people go far in debt buying stuff they couldn't afford and didn't need and bankrupted themselves over it and they do blame everyone but themselves.
ReplyDeleteBarring financial catastrophes like medical issues that preclude ever working again, it's on the individual. I really wonder about all the people who are saving absolutely nothing right now. We've always lived not just "within our means" but at least 10% below, so that we could save for retirement. I work in a CPA office that provides financial mgmt services, and the number of people who come in who are 60+ and have little to nothing saved, and want to retire in 5 years, is absolutely shocking to me. They have no idea how little they will receive from Social Security (as GenX, we have always assumed it won't be there for us). What are they going to do if they need the kind of daily assistance my parents needed when they are in their 80s? The assisted living home where my mom is now costs $9K/month - her LTC insurance covers all of it, but that particular type of LTCI isn't even available anymore. I can see a huge number of seniors never retiring (best case) or going bankrupt and ending up homeless if they have no family who can take them in (worst case) because they have no savings to live on...
ReplyDelete