Not Meeting Your Money Goals? It Might Be Your Fault


Here’s another great post from our friends at MainStreet:

Do you have Nordstrom bookmarked on your Web browser? Have any gambling chips from casinos you visited years ago sitting on your dresser?

A new study examines some unique ways that Americans are blocking themselves from financial growth.

We already know that many Americans do block their financial progress–after all, total revolving U.S. consumer debt hit $801 billion in December, according to the Federal Reserve.

That’s just the beginnning. Overall U.S. consumer debt stood at $2.5 trillion at the end of 2011, the Federal Reserve adds.

What can consumers do to stem the tide of all that debt?

Two New York Times best-selling authors have a new study out that shines a spotlight on the “unique” ways Americans trip themselves up on the way to financial prosperity.

The study, released on Tuesday by financial authors Joseph Grenny and Loral Langemeier, concludes that since 2007, three out of five American adults have failed to meet their financial goals. Even worse, the authors state, 76% of U.S. adults are “doing little to change their financial behavior.”

At first glance, that statement seems unfair.

Sure, millions of Americans would love to downsize and sell their homes, for example, but many are underwater on their homes, and are waiting out a housing recovery before they sell, so they can at least make a profit. Plus, the U.S. government reports that 12.7 million Americans are officially unemployed, with tens of millions more who have stopped looking for work, or who can only find part-time jobs. In many cases, it’s all the jobless can do to survive, let alone start mending their errant financial ways.

But the authors do make a fair point–that some of those “ugly scars” that Americans have suffered financially during the past five years have been self-inflicted, so much so that the study says only 6% of Americans are on track to save enough for retirement.

In fact, the authors state five ways that Americans hurt their own cause in terms of financial growth–and in ways that consumers may not even realize.

“We often believe the success of our goals hinges on our ability to summon the necessary self-control or willpower,” Grenny says. “But the truth is, we’re powerless to change our financial habits until we recognize the enormous number of influences that suck us into financial self-destruction. The key to change is not just to beat yourself up, but to take control of the influences around you.”

Here’s a snapshot of some of those “influences” that Grenny is talking about:

Internet Bookmarks

The study notes that if your home page is Nordstrom, you’ll think about Nordstrom and, as the authors say, “what you think about you’ll eventually buy.”


Grenny and Langemeier also say that friends and family can influence overspending. “If all you talk about with your friends is fashion, you will acquire more clothing,” they say.

Wicked Incentives

Too many consumers are, for the lack of a better word, suckers for a good marketing campaign. Say Grenny and Langemeier, “merchants masterfully use incentives to make you feel like you’re losing out if you don’t make a purchase.”

Credit Cards

In terms of accumulating debt, plastic can be painful to your financial health. “Research shows the further we get from paying with cold, hard cash the more likely we are to blow our budget,” the authors state. “Casinos use chips rather than cash for this very reason.”

It won’t be easy, but the authors say that even a debt-addled tiger can change its financial stripes. Start by tracking and reviewing all of your spending, and knock off the “mindless” spending. Also, try to cut 10% of all spending right off the top–“everyone” can accomplish that without too much pain, Grenny and Langemeier say.

If you’re in a downward financial spiral, taking full stock of your spending is an idea that’s way overdue. And if you want a brighter financial future, there’s no better time to start than the present.

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