5 Reasons Your Money Will Never Work for You

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“If only my income was greater” or “If only I had a million bucks.” Sound familiar? Well, you’d probably do the same thing you’re doing now: Spend it!

I know the phrase “It’s not how much you make, but how much you spend” is trite, but it’s also true. Many Americans tend to spend as much as or even more than they earn, and finance the rest. If this weren’t true, credit card debt wouldn’t be through the roof.

In today’s marketplace of new gadgets and toys, it’s not hard to find something else to spend any excess cash on.

Here are five reasons your money will never work for you:

1. You won’t face your situation

When was the last time you sat down and really assessed your financial situation? While I understand that you may be just one paycheck away from a breakthrough, at least for the next two weeks an in-depth assessment needs to be done. Besides, most financial emergencies wouldn’t be classified as such if humans would plan accordingly.

Start by reviewing your bank statements. Where is your money really going? Bills and a savings account or bills and waste?

Perhaps you’re buying tons of groceries only to spend several hundreds per week dining out. Or maybe you’re enhancing your nail polish collection each paycheck, but also continuously heading to the spa.

Regardless of where the problem lies, now’s the time to get to the root of it and start making changes.

Next, take a moment to rip open those credit card statements and see how much you actually owe, along with the amount of cash you are throwing away each month on interest. If that doesn’t motivate you to come up with a plan, I’m not sure what will.

What if you refuse to use any form of plastic to make purchases, yet your money disappears as quickly as it touches your hand? Keep the receipts for every purchase you make in the next 30 days. Once the time has lapsed, scrutinize your documents and you should have a clear idea of the problem areas.

Need a little help getting your spending plan set up? Check out “How to Develop An Effortless Budget You’ll Stick To.”

2. You lack discipline

If you want it, you buy it, even if your bank account advises otherwise. After all, you work hard, so why not enjoy life?

Well, there’s a slight problem with that approach. While tomorrow is definitely not promised to any of us, adopting that mentality in your spending habits is nothing short of detrimental. Spend like a maniac now, with a reckless disregard for your wallet, and you will surely pay for it many times over later on.

And let’s not forget about the emergency fund that’s dwindling as a result of your lack of discipline.

Take a look at “6 Ways to Game Yourself Into Saving Cash” to get back on track.

3. You aren’t realistic

The opposite extreme of wild overspending is deprivation. While you may have good intentions for your money, pinching pennies could very well diminish your quality of life. And one day you may wake up and go on a spending rampage to make up for all the times you’ve deprived yourself.

Yes, you need to cut your spending, but going way overboard to the point that you’re miserable will probably backfire. You need to treat yourself — within reason — every once in a while.

4. You’re addicted to debt

Instead of learning to make do with what you have, you’ve created a posh lifestyle supplemented by any and every ounce of credit you could get your hands on. Now you have a stunning amount of debt to show for it.

I’m not suggesting that you should live in a hovel or a dive, but you must learn how to be disciplined with your own money before you can possibly manage funds you’ve borrowed from the credit card company. Sure, you borrowed with good intentions, but the outstanding balance quickly spiraled out of control because solid money management principles were never ingrained in you. To you, credit card debt is a normal part of life.

Still in doubt? Take a look at “10 Signs You’re a Credit Card Addict.”

5. You make incorrect assumptions

You’re one of those people who is always eyeing the proverbial Joneses, looking at what new car is parked at their home.

As humans, we are wired to want more, some a bit more than others. But what is your motivation? Do you really think that bright new thing will make you happy? Is your desire sincere or simply envy of a lifestyle displayed by your favorite celebrity on TV? If the latter applies to you, no amount of money will ever be enough.

Another important consideration: Things aren’t always what they appear to be. The family you envy could very well be robbing Peter to pay Paul and falling deeper into debt to live in their dream home.

Is there any hope for me?

Most definitely. The first step to a solution is acknowledging you have a problem.

Then take action. Read “8 Smart Ways to Pay Off Debt Fast.” Once you’ve gotten your financial house in order, you will begin to enjoy the finer things in life.

What steps have you taken to make your money work for you? Let us know in the comments below or on our Facebook page.

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  • Y2KJillian

    The book, The Millionaire Next Door, was a huge wake-up call to me. The idea that real millionaires would prefer plain refreshments to caviar and vintage wines shocked me. To think that the “average” self-made millionaire usually has cultivated simple tastes in all things rings so true–and the idea that if you look rich, you probably aren’t, was one of those lightbulb moments. It meshed so well with the book “The Only Investment Guide You’ll Ever Need” (any edition from 1970s to 2011!) and his frugality and good sense. Our money is indeed working for us, and we’re taking care of it. It’s a nice partnership!

    • somyakomya

      Start working at home with Google! It’s by-far the>>CLICK NEXT TAB FOR MORE INFO AND HELP

    • Jason

      The Millionaire Next Door was a big influence on my wife and I as well. That was 10 years ago when we were 25 and swamped in debt. Today we are debt free with a healthy net worth. We live in a modest neighborhood and drive reliable used cars. Having no debt allows us freedom to travel and not worrying about making payments has removed a lot of stress from our lives and marriage. Digging out of debt wasn’t easy, it took 5 years, but was well worth it.

    • MrKnowitall

      How true, I read the book a few months ago and I came away with the feeling that I wanted to be frugal, that I embraced frugality as an enjoyable lifestyle choice. I was no longer embarrassed to drive my old but reliable car or wear a Timex instead of a Rolex. I will look for “The Only Investment Guide You’ll Ever Need”, thanks for the suggestion.

    • http://ecofrugality.blogspot.com/ Amy Livingston

      I love _The Only Investment Guide You’ll Ever Need_ not just for its sound advice (lots of books offer that) but for Tobias’s entertaining writing style. The trouble with most investment guides is that they’re so dry, by the time you struggle through a chapter you can’t even remember what the advice was. Tobias keeps your attention with real-life illustrations and humorous anecdotes. It may not be the only investment guide you’ll ever need, but it’s probably the only one you’ll reread for fun.

  • Sulia

    There are situations in live which can put you in debt even with good knowledge of managing your money.
    Don`t judge book by it`s cover…