Financial Pitfalls are not about Money

At first glance, it appears financial problems are primarily about money. But my experience is most financial mistakes often point to other obstacles.

We all have our experiences and frameworks that have gotten us to where we are. Sometimes our choices are from ignorance. Other times, the reasons behind our behavior may not be as apparent.

How we spend and interact with money is a symptom of more significant issues. These problems can either lead us to make sound financial decisions or be the result of massive credit card debt. Maybe we struggle with talking about money with our partner. Or we find that when we get stressed, we eat out more.

To tackle our money problems, we have to get behind the behavior to see what is going on.

Behavior Management

Most people can change their money habits temporarily. But the focus should not be on only doing the right things. Once things settle down and the original motivation wains, we will revert to what comes more naturally to us.

And this is why figuring out the reasons behind our behavior can help lead us to change our actions permanently.

There might be areas where we lack knowledge, and we should pursue educating ourselves on what we don’t know. However, most core money issues are not caused by what we don’t know.

  • Most of us know we should not spend more than we make, and yet on average most of us have large credit card balances.
  • We know that to retire, we need to start saving. However, few people are investing in their 401k’s.
  • It is common knowledge that we need to watch what we eat and exercise to be healthy. But few people develop these habits.

How do people make healthy financial choices over the long-term?

When we are happy and healthy, it is easier and more natural to avoid financial disasters, which is why it is not a good idea to focus on changing our behavior, as it usually leads to temporary changes.

Maybe the best place to start is to “fake it until you make it.” But this is not going to last long-term if we don’t realize our actions are a result of other feelings/ideas/problems that we need to focus on to change our trajectory.

But to change our behavior permanently, we have to eventually move from the “fake it until you make it” mentality, to a place where good money decisions are a result of a lasting change in our lives.

What Matters Most

There is always a reason behind our choices. We don’t live life doing random things for no reason.

One way to tackle money problems is to take a look at what we want. When we are old and wrinkled, what kind of choices will we be happy to have made?

Things that will matter the most:

  • Our relationships: How connected we are to the closest people in our lives.
  • What we accomplished: Have we worked as hard as we could have with how we spent our time?
  • Enjoying life: Did our experiences cause us to enjoy life?
  • Memories: Having tons of great memories will help us have a positive perspective on our past.

Things that won’t matter as much:

  • Stuff we purchased: Material possessions we want and don’t “need” can only give us a certain amount of value.
  • The house we lived in: We often get used to and learn to enjoy wherever we end up living.
  • How much we earned: It becomes more about how we used what we made, instead of earning massive amounts of money. Obviously earning more money can give us more options, but it can also sacrifice other priorities.


Looking at what we want to accomplish can help us determine what choices are not leading us down the right path.

When I think purchasing an expensive TV that I can’t afford is going to make me happy, it becomes easier to justify spending more than I make and going into credit card debt. But when I realize this item is not going to add much value to my life and is going to limit my options, it can provide the power I need to make smarter financial decisions.

Financial problems ultimately come down to us being confused at what we want out of life and what is worth pursuing.

Weigh the Pros vs. Cons of Our Financial Choices

Asking ourselves this question will help us determine whether this financial decision is worth it:

Will I regret making this decision in the future?

We can’t 100% know for sure how we will feel about our past financial choices. But previous decisions can help us determine how repeating those choices will make us feel in the future. In my opinion, this is the best option to figure out how we should move forward right now.

Another way to look at this is to make a document with two columns. In the first column put the questionable things you want to buy right now. In the second column describe what things you could do with that money instead that pushes you towards your goals. By comparing and contrasting the choices directly, we encourage our minds to think about these decisions from a more logical perspective.

Get Emotional About Your Dreams

Emotion often drives us to make decisions. And this isn’t necessarily a bad thing, as we are emotional creatures. If we remove emotion from our lives, we become robots.

We can tap into the power of emotion to push us towards what we really want by getting emotional about our dreams.

Often this is a matter of focusing our energy and time on what we want to achieve and where we want to go in the future.

But you have to know what those dreams are and envision yourself experiencing the emotion of achieving those dreams to tap into this power. This process does the following:

  • Focuses our time and energy on what we want.
  • Helps us make choices that we will not regret in the future.
  • Refills our “energy bar” in pursuing what matters most to us.

What methods have you used to tackle your financial problems and what you want to achieve?

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