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More than half of Americans say that the present day is the worst period of American history that they can remember, according to a new survey of stress in the United States.
Throughout the last 20 years, I’ve asked myself the same question over and over: What do people really want out of their financial lives?
I keep asking the question because the answer keeps evolving.
My earliest answer was “a person wants to make enough money to live the life they want to live.” I was happy with that answer until I realized how vague and riddled with logic flaws it was. It’s the epitome of a wild goose chase.
Over the last couple of years, I concluded the answer to my initial query was people want a solid income, no financial stress and a successful retirement outcome. And while this is still true, these desires are further down the priority list than I had originally thought.
We want the ability to make these ambitions our realities. But wouldn’t you rather have the tools to deliver on your original goals?
I now believe people are seeking something they don’t even know they’re seeking, and that’s why so many people are having trouble finding it. The financial mistakes we make are attempts to gain what we so esoterically seek.
We seek self-control.
‘I’m in charge!’
Do you want to know why you buy things you can’t objectively afford? Because you want to feel like you’re in control of a situation you aren’t really in control of. “I’m in charge!” your credit card screams, acting as the emissary of your financial baggage at your favorite retail store. But you’re not in charge if you don’t have self-control.
Self-control is a learned behavior which can be borrowed from other aspects of your life. You can draw on other exhibitions of self-control to power your financial life. Have you ever quit smoking? Great, you have what it takes to master financial self-control. Have you ever taken control of your fitness and diet? Fantastic. The parallels between health and wealth are almost eerie.
Millennials, this is how you can fix your YOLO financial mind-set.
Wealth doesn’t really matter
Don’t mistake self-control for having so much money that you’re virtually in control of your destiny. Even people who seemingly have all the money in the world don’t necessarily drink from the grail of self-control.
True self-control is agnostic of wealth. That’s why you can relish financial self-control without great wealth. You don’t have to have a lot of money. You just need to not need a lot of money.
You know, or know of, a wealthy person who has everything but self-control. There’s a myth that people with money or healthy incomes get their money or incomes due to great financial wisdom. Anecdotally, that’s rarely the case.
A brain surgeon’s financial success on paper doesn’t necessarily have anything to do with financial wisdom, self-control or fiscal perfectionism. I know this because I’ve met several brain surgeons who are financial disasters — and lawyers, and professional athletes, and salespeople, and CEOs (and financial planners for that matter). Until those individuals find self-control, there will be an emptiness unfilled by cashmere scarves, luxury cars and whatever other material possessions they think lets them be a shot-caller.
Self-control fills all voids, chasms and deficiencies.
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An intentional effort
I’ve been experimenting with acts of self-control in my own life over the last two months, specifically in the realm of health and fitness. The effort has been worth it. The strange part about intentionally seeking self-control is that it continues to reveal new aspects of itself as time passes.
For example, it feels good to not default to a burger, fries and a beer during a layover at whatever airport I happen to be in. At first, it was a struggle and I clung to the good feeling I got from making the right food choices. But now it’s evolved into the power of effortlessly being able to say no to something which has brought me so much pleasure (and extra pounds) in the past.
On your quest for financial self-control, understand that it’s a process. You’ll be forced to park your emotions, ignore account values, and resist the magnetism of consumerism. In all honesty, persistence here is easier said than done. Your emotions alone are enough to wreak havoc on your intended outcomes.
If you haven’t started investing yet, these tips will help get you on the right track for retirement.
Want to give it a shot?
Choose a goal with the financial price tag equal to two months’ income. Ideally, your goal is to pay down debt, set money aside for the future, or fund a practical solution to a major problem.
Start by dedicating at least 10% of your next paycheck to the goal. You can likely tolerate this with just a few small adjustments. But at the 10% level could you handle this for 20 months? Or could you make 20% work for 10 months? Because that’s how long it would take.
I don’t think you can do it without employing self-control. To succeed, you’d be forced to scrutinize your current habits, and then slash other expenditures which once seemed un-slashable. The whole process is a grind until self-control kicks in. At that point, it’s truly a pleasure.
Peter Dunn is an author, speaker and radio host, and he has a free podcast: Million Dollar Plan. Have a question about money for Pete the Planner? Email him at AskPete@petetheplanner.com.