The personal finance blogosphere has it’s share of stars. These superheroes of personal finance walk, or bike, among us. They look like you and me…for the most part. 😉 They have interests that are similar to anyone else, join the same clubs, and attend the same churches. Their kids ride the school bus with your kids.
They even shop at the same stores, although you may not spot them there very often.
Who are these champions of financial freedom? They are parents, professionals, bloggers, entrepreneurs, and even educators. In essence, they’re not much different than you and me.
Make no mistake, they’ve accomplished some incredible things, hence the ‘superhero’ tag.
Whether it’s helping thousands of people find freedom from debt, inspiring their generation to take control of its financial future, or demonstrating what’s possible when you take a no-limits approach to money and life, their stories are truly inspiring.
Their paths are unique, and their skill sets are varied. However, and I can say this with absolute certainty, each one of these ‘heroes’, and others like them, at one point or another have had to confront their own financial kryptonite and find a way to overcome it.
I don’t know their stories in intimate detail, but what I do know is that everyone has weaknesses.
And this extends to how we manage our money.
Managing finances is all about psychology and emotions. And anytime your emotions are involved in something, things are bound to get interesting. After all, you’re not a robot. You won’t always make the right decision, and then execute it with fine-tuned precision.
It’s true that some people are naturally better money managers than others. But whether you were genetically pre-disposed to being extremely frugal, or it was something your parents enforced upon you until they were blue in the face, you’ve got a soft spot somewhere.
FINANCIAL KRYPTONITE EXPLAINED
Let’s say you have a lot of high interest credit card debt. The debt isn’t necessarily your kryptonite, but the psychological factor which caused you to go into debt very well could be.
For example, if you’re always at the mall buying new clothes on credit, whether you need them or not, then there’s a good chance that impulsiveness is your kryptonite.
Not the credit card, or the resulting credit card debt.
If you can find a way to overcome your impulsivity, you can find your way out of debt.
Your financial kryptonite can be so many things. It can be your overwhelming fear of missing out, the pride of wanting to look good to your friends, which is really just insecurity.
Or perhaps it’s envy, or jealousy. Maybe laziness or a lack of self control, or the desire for comfort and convenience.
Any of these could become your financial kryptonite, and if left unchecked, they could keep you from a life of financial freedom.
IDENTIFYING YOUR FINANCIAL KRYPTONITE
I’ve come up with a few ways (short of therapy, haha) to help you identify your financial kryptonite.
Take a look at what you own.
Do you own the most expensive house in the neighbourhood, or does it fall on the more modest side of your friends and acquaintances.
Have you purchased a vehicle for every driver in the family, lest anyone have to share? In that case, I would argue that your kryptonite is in fact your desire for convenience, rather than the cars themselves. A life of ease at any price.
Take a look at what you owe.
Do you have consumer debt? Large or small, the source of your debt could lead right to your financial kryptonite.
Does your credit card statement read like a directory of every restaurant and coffee shop in town? That might be a sign, whether or not you pay the balance in full each month.
Have you refinanced your mortgage 3 times in the last six years to accommodate yet another big ticket purchase? If so, why? What was the overriding emotion behind these decisions?
After all, the mortgage isn’t your kryptonite. But maybe you keep telling yourself that a shiny new toy will somehow make things better in your unhappy marriage. Sounds crazy, but it happens all the time.
Review your bank account statement.
This is a great activity for anyone. Take a look at your spending history for the past three to six months. Chances are, it’ll be a real eye opener. Human’s are creatures of habit after all. Do you notice any surprising trends in your spending? What motivated your spending? Don’t be afraid to ask yourself the tough questions?
OVERCOMING YOUR FINANCIAL KRYPTONITE
Once you’ve identified your kryptonite, you need to deal with it. Here are some steps to take:
Accept that it exists.
Hey, you know what they say, denial ain’t just a river in Egypt.
The first, and biggest step to overcoming any weakness is to acknowledge that it exits.
Don’t be too proud. Get it out. Tell someone about it. Heck, start a blog and write about it!
There was a day when I had to verbalize the words…”My name is Mystery Money Man, and I love new cars…”. Ok…it didn’t sound quite like that, but I am acutely aware that my heart rate increases ever so slightly whenever I walk past a nice Audi or Porsche…heck even a nice Camry or Accord does the trick. I know…that’s pretty sad.
Thankfully I recognized this about myself several years ago, so it’s a weakness I’ve learned to control.
Lock it away in a thick lead box. 😉
In other words, if your financial kryptonite has a hold on you, run as far away from it as possible. I’m telling you, flee from temptation.
If it means avoiding certain stores, or the mall altogether, or even taking a different route on the way home from work to break your routine, so be it. Whatever it takes.
Maybe it’s simply being prepared to decline yet another invitation from a friend to spend money.
By the way, NOT going out doesn’t have to mean opting to re-string shoelaces or watch paint dry. Change your mindset! Think about all of the healthy, life-giving, (and free) activities you’re missing out on by opting for the same old, same old expensive stuff.
Determine how many hours of your life it will cost you.
Before you buy any non-essential item, calculate how many hours you will have to work to pay for it. The hours spent are not just hours at work, earning money, but hours of your life that you won’t get back. Time is a non-renewable resource, spend it wisely.
This is a lesson I’m teaching my son right now. He started his first job about 8 months ago, and on a couple of occasions has experienced the remorse of spending money on a big ticket item, only to have the novelty wear off. He’s learning.
It’s a lesson we’ve all had to learn.
Incorporate a cooling off period.
Maybe your kryptonite is an impulsive nature. If so, I don’t have to explain to you the feeling, the rush that comes with finding the newest thing on the shelf at your favourite store. The emotional high is palpable and you will find any way to justify making the purchase.
“It’s on sale….I mean, I can’t really afford NOT to buy it.”
“Limited time offer…if I don’t buy it now, I may be out of luck”
It’s nothing short of intoxication.
Don’t drive drunk.
Don’t buy groceries when hungry….
that’s me, er…thought I’d throw that one in there. : )
Don’t spend on impulse.
I know, sounds like a stretch. Or is it?
Instead, make a policy of waiting at least 48 hours instead of buying anything on impulse. If it wasn’t a pre-planned purchase, it can wait.
Chances are, once you sober up from your material intoxication, you’ll make a better decision.
Chances are, you’ll overcome your financial kryptonite.
There you have it, some important tools to help you identify and overcome your financial kryptonite. If you can figure it out, you’ll be headed for financial freedom faster than a speeding bullet, much like our personal finance superheroes.
Question: What is your financial kryptonite? If so, what level of control do you have over it? I’d love to hear your thoughts on this topic!