We all have our demons.
Some just lurk under the bed, but others bare their teeth as we go about our day—say, every time we pull out our wallet.
Financial demons are particularly vicious because their effects aren't confined to the pages of our journal or emails to our best friend. Our finances permeate just about every aspect of our lives, from where we live to the job and lifestyle we choose.
And for that reason, our financial demons can be particularly invasive--and toxic.
But the good news is that demons can definitely be vanquished (or subdued, at the very least). As with anything, they can be worn down with the right tools and the right mindset. Fortunately, we have both.
First, identify your demon ... or demon(s). Then we'll show you exactly how to send them packing.
If You Have Shopping Demons ...
The Tools: As you know, "just stop shopping" isn't helpful advice. Instead, look at your habit from the other end: Your closet. Your makeup bag. Or your gadget collection, depending on the spending that's most problematic for you. Use our process fromPriceless Style Bootcamp to evaluate your ten most recent purchases. If lots of your recent buys are rated "not worth it," it's time to reevaluate your spending patterns. The first step is to avoid letting one bad spending choice drag you into a downward spiral. If you suspect you're currently in such a phase, you can use this tool to spiral back up. If your purchases are all rated "worth it," but you know you're shopping too much, take a close look at your last month of spending and ask yourself whether you're truly happy with everything you bought, or if that same amount of money could have been applied to a different financial goal, whether bulking up your emergency fund, or beginning to invest.
The Mindset: Instead of being just a shopper, be a smart shopper. A purchase should never make you feel guilty or regretful. The same sweater can be worthwhile or unnecessary, depending on the circumstances surrounding its arrival in your home. So, before buying something, imagine yourself in a month: Will you still be glad you bought what you did? If you decide you want that item later, it (or one just like it) will still be there when the time is right.
If You Have Debt Demons ...
The Tools: First off, not all debt is the kind with fangs. Student loan debt, for instance, can actually help your credit score. In Get Out of Debt Bootcamp, we break down which debt is harmful and which is just annoying, then show you a way out. If you're facing credit card debt, we recommend that you immediately stop using your card for non-essential purchases. To make the commitment to your finances more permanent, take the LV Pledge and then print out our money wraparound to remind yourself of that commitment every time you go to use it. You'll never climb out of that hole if you're still digging.
The Mindset: Debt does not make you a bad person. It does not make you irresponsible or unintelligent. Debt is frequently a result of unforeseen circumstances like hospital bills or the recession, and the aspect that reflects on you the very most is the fact that you're trying to eliminate it. Approach paying off your debt as you would any other project, with planning, small steps and genuine excitement at the thought of seeing it completed.
If You Have 'Friends and Family' Demons ...
The Tools: Peer pressure demons include that friend who keeps inviting you to $100 dinners, the significant other who thinks your year-end bonus should go to a weekend in Vail rather than to max out your IRA (or who tends to overspend for the both of you, or parents (or in-laws) who pressure you to keep up with their lavish lifestyles. You know they love you, but that only makes it harder to say no. For your detailed strategy when it comes to dealing with money-toxic friends and relatives, read this. Meanwhile, significant others come with different needs and issues, especially in a shared household. Here are the top eight reasons couples fight about money, and how you and your significant other can stop.
The Mindset: It may feel like a me-versus-them situation, but it doesn't have to be squabbly. By advocating for yourself, you're being both practical and mature. Not only will this help you avoid spending money when you're uncomfortable, but it'll also set important boundaries for your relationships and show that your (very reasonable) opinion matters.
Are You Paying Student Loans?
College was great, but the debt ... not so much. Share your tips for effective debt management and learn from others in LV Discussions.
If You Have Credit Score Demons ...
The Tools: Your credit score is simply a tool to help lenders evaluate how trustworthy you are. Since they can't spend a week on your couch asking you questions about your ideals, they base their judgment on a three-digit number between 300 and 850. A low credit score--below about 650--can sabotage your ability to make large purchases such as a home or car—or affect the rates on loans you'll get to do so. Start by checking your credit report for errors (you can get a free report at AnnualCreditReport.com). Going forward, check your score for free on CreditKarma.com as often as you'd like, so you can monitor your progress as it happens.
The Mindset: Think of your credit score like a puzzle. Which are the biggest pieces and how can you fill them in? You can't undo the past, but from now on, every action you take can help complete the puzzle. Rather than letting a low number get you down, embrace the excitement of watching that number go up and up as you make small changes in the way you use your credit.
If You Have Competitive Demons ...
The Tools: Keeping up with the Joneses is hard enough, but practicing the ancient art of financial one-upmanship will really create problems for your bottom line. Shiny new toys and dollar-sucking experiences aside, constantly competing with and comparing yourself to those around you is exhausting, not to mention debt-inducing. We've created an anti-comparisonitis game plan, here.
The Mindset: You should be able to recognize that someone will always be "er" than you. Richer, smarter, prettier, better at any number of things. And you can't control them. The sole person you can control is yourself. Instead of fighting to be "er," celebrate what's already great about you, and work on doing the best you can to improve all aspects of your life: work, family, friendships, finances.
Financial demons are undoubtedly rough, but once you know why they're so troublesome, they're much less threatening. With a cool head and little information, you'll have them hiding under the bed.