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How to Avoid the Top 5 Money Mistakes

What’s your internal storyline about money? Maybe you start your day feeling pretty darned good about your financial situation, and by evening news, your teeth are chattering with fear and confusion.

Let’s face it. The money habits we hold become more complex with each day’s headline. It’s not too difficult to slide down the rabbit hole of fear and scarcity. That door is always open. You can, however, open a new and better door, but you first have to know how.

If you want to avoid the top five money mistakes, the first step is naming your own existing pitfalls. You can’t walk around something if you don’t know it’s there. Chances are you’ll continue to stumble and fall over the same old obstacles until you identify what’s yours. It might help you to consider that these mistakes usually land in two or three categories: how we earn, spend, and save or invest.

Our goal here is awareness not perfection, so I’m going to offer you the five money mistakes that are showing up in my research linked to The Time Money Inventory. Let’s dive into a few misperceptions held by those who score in the High Money Scarcity category.

Warning: If any of these money “mistakes” resonate with your current financial experience, don’t panic. The point is to learn more about where you are so that you can wake up to a new way of being in the future.

Remember, my mantra: With the first moment of awareness comes opportunity for change.

1. A Limiting Belief: I Don’t Know How to Earn or Manage Money.

Everything begins with what you believe. Notice I didn’t couch this perception as an inability to earn or manage money so much as a belief that I don’t have the capacity to do so. In other words, you might find that you have low self-efficacy when it comes to money.

When we don’t believe we have the skill set needed, it’s easy to mismanage what we’re doing and claim ignorance.

If you have low self-efficacy, it doesn’t mean you’re dumber than a dead fly on a hot summer day. It probably just means that you just haven’t yet learned the rules of the money game. If you don’t know the rules, and everyone else does, how can you expect to play?

The #1 pitfall that I witness in this category is the inability to place a value on one’s own time. If I don’t value my own time, I can’t expect other people to value it. I may fail to ask for just compensation. Or, I might even fail to seek greater opportunities.

There is always a payoff for what we believe, so the question then becomes, what am I being loyal to such that I hold onto this limiting belief?

For example, I know that I sabotaged my own success for years because I was loyal to my family’s tradition of hard work and struggle. It just didn’t seem fair that I should make a healthy living doing something as “simple” as speaking or writing.

Our money scarcity storylines are often attached to our original family systems. If we want to bust down the door of scarcity, it’s wise to examine those systems and the internal dialogue we still carry in loyal support of what they once were.

Reflective Question #1:

What emotions, thoughts, or feelings rise up in me whenever I think about my capacity to earn or manage money?

If you find yourself offering up a negative response to this question, even if your family history was a positive one, it might be time to seek advice so that you can gain a greater sense of self-efficacy with respect to your finances.

2. Lack of Financial Responsibility: I Don’t Know What to Do, So I Wing It.

If you’re tripping over consistent financial chaos, it may be because you’re not taking responsibility for your choices. Sometimes we just get stuck. These tendencies might show up as overspending or a general lack of self-control when it comes to money.

It’s difficult to climb out of the rabbit hole when you’re constantly digging yourself in deeper. At some point, it’s wise to stop, take hold of where you are, examine the places where you’re out of control, and then do what you need to do to reverse your situation.

Yes, there will be sacrifices along the way, no doubt, but once you develop a practice of financial stewardship, your situation will level out. You will then have space to creatively take the next step.

Reflective Question #2:

What skills do I need to learn in order to be more financially responsible?

Taking financial responsibility means that you identify what’s not working so that you can begin to do things differently. If you’re not exactly sure what’s getting in the way of your financial stability, pay attention to your emotions.

What was the last action that caused you to feel guilt or shame? Chances are those negative emotions will point you to what’s sabotaging your ability to be financially responsible. More importantly, avoid any temptation to blame others for your situation. Blame is like a boomerang that circles ‘round to knock you sideways. Taking responsibility requires that you name and own what belongs to you. Holding on to the rest of it, whatever “it” is, will only serve to keep you stuck.

3. Inability to Think About Future Needs: I’m so Busy Surviving, I Can’t See Forward.

Some of us have a personality structure that simply doesn’t support us in visualizing the future. If you’re wired this way, it doesn’t mean you can’t change. It just means that visualizing might require some practice.

The price we pay for this inability to visualize the future shows up in many ways, but the primary one is an inability to plan for future needs. These needs can range from a micro-need of saving for a rainy day to the macro-need of preparing for retirement. When it comes to money, everything is relative.

Bottom line: You should know what you need to earn vs. what your operating expenses are, and while this might sound obvious, people who live in High Money Scarcity often live in survival mode. They literally cannot see or think beyond the next paycheck. It’s the old adage of “fail to plan, and plan to fail.”

Without a plan, you may be living from paycheck to paycheck, hoping to win the lottery, silently wishing for some cup of gold to fall from the sky—all the while working harder and harder. It’s what we call in the field of human development, magical thinking.

Reflective Question #3:

What do I need to investigate in order to position myself for financial stability in the future?

If you’re living blind, the quickest way out is to seek financial advice. People often make the mistake of thinking that when they have limited financial resources, no one will help them. Let’s be honest. It can be embarrassing to even ask for such advice. The reality is, the less you have, the more support and direction you need. The only way to break the cycle is to learn what you don’t know.

As I stated in an earlier blog post, the good news is, there are plenty of low-cost resources via books, podcasts, seminars, and coaches that can counsel you on how to reverse a cycle of financial instability.

4. Lack of Generosity: If I Contribute to Others, What About Me?

This money mistake shows up as an inability to give to others out of fear of not having enough to meet my own basic needs. It’s not that you don’t want to be generous. It’s just that you’re paralyzed by fear of not having enough for your own expenses.

This perspective seems to be showing up right now amongst baby boomers who are transitioning to limited incomes. Many have enjoyed great financial success and have retirement funds, but the combination of a fixed income and an increase in the cost of living can easily push them into this misperception. Their greatest fear is outliving their resources.

This is an honest concern, but the deeper truth is that when we contribute to others, we generate a cycle of gratitude and compassion that strengthens our relationships and gives us a greater experience of life. We come to enjoy prosperity from an entirely new point of view.

Reflective Question #4:

How do I experience money in relation to others?

This is a key question that will help you determine much of the stress in your life simply because how we spend our money is a key indicator of what we value most. If you’re struggling in this area, determine one thing you can do to offer up financial resources, no matter how small, to someone you care about and watch what happens

5. Denial of What Is: Those First Four Mistakes Pertain to Somebody Else—Not Me!

Need I say more?

If you want to learn more about how your experience of money is impacting your potential for health and well-being and greater success in your life, stay tuned for my upcoming book, The Pursuit of Time and Money: Step Into Radical Abundance and Discover the Secret to a Meaningful Prosperous Life (to be released Summer, 2017).

Published by Sharon Spano, Ph.D. April 4, 2017