Author Archives: Steven

Rationalizing Your Behavior

26 March 2009

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While reading an article in On Earth Magazine, I came across a very interesting quote:

“…Downplaying individual actions is another way we rationalize our behavior.”

by rachel.am @ FlickrI couldn’t say how many times I’ve told myself that I am only one person and it doesn’t matter what I do because my actions will not change the world or have an impact in any way.  Even though I knew that recycling was important I felt like my efforts were wasted or at least nuetralized by my neighbors garbage cans packed full of recyclables.  Eventually I began to realize that while it is true that I am only one person, a community is built of individuals and the world is built of communities.  Instead of being a part of the problem because I felt as though my efforts wouldn’t make an impact I decided to do what I could to be a part of the solution, even if only in my small ways.

Downplaying our individual actions is only one way which we rationalize our behavior.  We also use the “But Everyone Has A…” Mentality.  We rationalize that because “everyone” has credit card debt or a car payment that it is acceptable that we have these things as well.  Even though we are hurting our overall financial health by having these things we justify it based on the criterion of comparing our situation to those around us.

I’ve used this method of justification countless times.  When I was in credit card debt I felt as though it was an acceptable situation to be in because everyone I knew had credit card debt, and many of those people had much more debt than I did.  In my mind, despite the fact that there were times when I was not able to make the minimum monthly payment, I felt that I was doing fine.  I thought personal finance meant being able to pay the bills at the end of the month.  I had no reason to believe that “normal” people could save money and not have to live paycheck to paycheck.  I was in denial of my situation and using any excuse I could to rationalize my behavior and tell myself that my situation was acceptable.

We also rationalize purchases when we are out shopping.  You may find yourself saying “I might need this someday,” and 6 months later you find that item stuck away somewhere never having been used.  You put it back wherever you found it and that is where it will remain until the next time you are cleaning.  We find ourselves in a pattern of purchasing and hoarding items that while having potential of being used, oftentimes do not.

I used to be a compulsive spender.  I had collections of just about everything a person could imagine.  There were coin collections, magazine collections, trading card collections, toy collections, DVD & CD collections, vinyl records…even though I didn’t have a record player.  I would constantly add new things to my previous collections or find something new to collect.  I had a sort of hoarder mentality.  I thought that there may be some value to the things which I was collecting, and to some degree I was right, but for the most part I was collecting stuff out of some strange obsession with acquiring material objects.  As I work towards purging my life of all of the things which I acquired I still battle against the thinking that I am letting go of opportunity to capitalize on the sale of these items or that somehow they will bring some sort of value to my life.  I know that neither of these assumptions are true, but I still struggle with them.

Rationalizing your behavior is a “defense mechanism in which unacceptable behaviors are explained in a rational or logical manner and avoids the true explanation of the behavior.”  You are making excuses, and even though they may seem reasonable, they are still just excuses.

Create a List

25 March 2009

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"Bucket List" by er3465 @ FlickrHaving a visible reminder of want you out of life is a great way to motivate yourself.  The easiest way to do this is by creating a list of your goals and keeping it in a place where you will see it on a regular basis.  Maybe you could post it on the bathroom mirror or on the refrigerator next to the kids’ art masterpiece.  Chose a location which is highly visible and convenient for you.

In a corporate world this list may be called a Rolling Action Item List.  At home it may be called a “To Do” List.  Your list can be long term goals or even short term goals.  I find that when I make a list of all of the things I need to get done during the weekend that I am more likely to accomplish those things if I have written them down.  If I don’t have a reminder of what my priorities are, I tend to ignore my responsibilities and don’t accomplish what I need to.

Here are some tips for making the most out of your list:

Be Specific. When creating a list of your goals, either short term or long term, it is important that they be specific.  Having a goal to “Boost My Emergency Fund” is a great goal, but it is much too vague.  A better way of wording this goal is “Increase my Emergency Fund balance to $5,000.”  Now you have a specific number you can work towards.

Set a Time Limit. Having a time limit gives you a deadline to work against.  It is important that you set a reasonable time limit.  You don’t want to limit yourself too much because the challenge may cause you to give up if it is too hard to achieve your goal, but you also don’t want to set the deadline too far into the future.  If your deadline is too far away you won’t be motivated to work towards the goal and eventually you will just stop working towards the goal.  Consider a reasonable time limit that will be challenging but not impossible.

You can take your goal of “Increasing my Emergency Fund to $5,000” and turn it into “Increase my Emergency Fund to $5,000 by December 31, 2009.  Now you have a clear picture about how much and how long it is going to take.

Make Your Goals Actionable. By following both of the steps above when creating your list you now know exactly what you want to do and how long it is going to take in order to get it done.  By knowing this information you can create a plan to successfully complete your goal.  You need to break your goal into smaller steps.  You can eat an entire elephant one bite at a time.  If your goal is long term such as biking the west coast, your first actionable step would be to begin researching what sort of bicycle you would need.  After you have that information you need to get a bike.  Then you need to practice riding, increasing your distance each time until you have reached your desired daily distance.

For the example of the emergency fund, if you already have $1,000 saved then you only need $4,000 more in 9 months.  That is $445 a month.  That is a pretty steep goal.  Maybe we can break it down even further to $112 a week.  That is still pretty tough.  What about $15 a day?  That seems more manageable.  I am sure that there are ways of reducing our spending by $15 a day without cramping our styles too much.  It just takes a little creativity.

A list is one of the easiest ways of motivating yourself towards accomplishing your goals.  I always keep a notepad and pen handy so that I can write down my thoughts and goals.  I recommend that you do the same and follow the steps I outlined above in order to make your scribbles become a reality.  Just remember, a list isn’t going to do all of the work for you, it is just the beginning and the rest is up to you.

Frugal for All the Right Reasons

24 March 2009

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"Endless Travel" by buggee @ FlickrMany people think that frugality means a person is a tightwad, boring or self-righteous.  There is a perception that a person cannot be fun or exciting if they chose to spend money thoughtfully instead of frivolously.  A frugal person may not coalesce in a circle of friends which finds itself socializing over drinks at an expensive lounge, however, this does not reduce that person to a boring stiff.  It only means that their priorities are in different places.

For me, frugality is all about living in harmony with my values, my environment and my finances.

The way we are treating the planet frightens me. We have an ocean being choked by our discarded plastics, polar ice caps which are disappearing, and Air Quality Alerts have become as common as Thunderstorm Warnings.  Frugality allows me to eliminate the volume of stuff which passes through my hands and into a landfill by not buying it in the first place.

I haven’t always had this perspective about waste. I used to be a super-consumer, buying everything I could get my hands on. There was an insatiable desire for stuff. I never had enough and always needed more.  As I began to analyze my life and my priorities with more scrutiny I learned that I was not directing my finances in ways which were conducive to my values.

I would always talk about wanting to travel around the world, but instead of saving for a plane ticket, I would buy a DVD. Instead of getting my passport, I would spend the money on clothing. I knew what my priorities were, but because I wasn’t aligning my spending with them, it was likely that I would never accomplish anything I wanted to.

Eventually I realized that by spending frivolously I was blocking my own success. I was living paycheck to paycheck because I was spending as fast as the money would come into my hands.  When I stopped spending my money on things which provided my life with no value I began accomplishing my goal of travel. 

My first travels were short camping excursions to the Rocky Mountains and extended weekend trips to other places I’ve always wanted to see like Niagara Falls and Washington, DC.  As I continued directing my finances in ways conducive to my goals, the trips began getting longer and further away.  My first major international trip was to Argentina for 2 weeks and about 6 months later I was off to Aruba for a 2 week vacation in the sand and sun.  Now I’m looking forward to 9 days in the Las Vegas area at the end of May.

The same people who may consider my frugality boring often tell me they wish that they could afford to travel as often as I am able to.  They seem to think I hold some sort of secret that I’m not letting them in on but the truth of the matter is that I prioritize my time and money in ways which allow me to achieve my goals.