10 MIN READ
As a financial planner, I hear all sorts of reasons about why people’s finances are the way they are; all the reasons why they’re financially stuck and not making progress.
Let me know if any of these sound familiar:
We have $10,000 in credit card debt because my wife lost her job.
My credit score is terrible because I couldn’t make my monthly student loan payments for 5 years.
I lost a lot of money in my 401(k) because I didn’t know my investments were too aggressive.
I’m behind on retirement savings because I had to take money out of my Roth IRA to buy my first house.
These reasons might also be known as excuses.
And that’s probably the number-one reason you may feel financially stuck, or why you haven’t achieved this financial goal or that thing in life that’s really important to you.
You can always find a reason — a reason that’s certainly not your fault — for why you’re not in the financial position you want to be in.
There’s always a reason for why you’re financially stuck, why you can’t move ahead; always a reason for why you are where you are instead.
It’s Human Nature to Find the Reasons
Before this makes you feel too guilty (or irritated, if it sounds like I’m suggesting everything is your fault — I promise that is not the point here), the first thing to know is you’re not alone.
This is human nature. We always look for the reasons for everything.
And as humans, we are reason-making machines — meaning, if our brains don’t immediately pick up on an obvious reason for something that makes us feel good about the situation, then we’ll just make one up and happily believe in it.
Said another way, our brains need reasons so badly that even if there isn’t one, our minds will supply one for us. We’re so dependent on reasons that we often obsess over them instead of looking at what would actually help the situation.
Take that first reason above as an example: We have $10,000 in credit card debt because my wife lost her job.
Is that what actually happened or merely one interpretation of events?
I’d argue the latter. What if what happened to someone who claimed they were in debt because their spouse lost their job was some combination of the following?
- They never tracked their spending or budget carefully, and as a result they formed a habit of spending everything they earned each month and failed to guard against lifestyle creep.
- Because they didn’t use a system to manage their personal finances, they occasionally dipped into savings to cover an expense here or there when they spent more than what they earned.
- Or maybe they saved a little to retirement accounts — but never bothered to set more money aside when employed to create an emergency fund.
- And so when their spouse lost their job, they didn’t have any savings to fall back on…
- …and they just kept spending like they always had and made no effort to change their habits even as income dwindled and the balances on the credit cards went unpaid, resulting in credit card debt.
In this case, the debt was not because someone lost a job.
The reason for the debt was a combination of poor spending habits, lack of awareness, and an unwillingness to make necessary but tough lifestyle changes to get through this period of time where the household earned less income.
Coming Up with “Reasons Why” Is Detrimental to Progress
Now, I understand some situations are completely out of your control.
Maybe there is a valid reason someone ends up with credit card debt after a spouse lost a job. Maybe you are completely justified in thinking “I’m in this position because of [insert thing that happened to you here].”
But that doesn’t solve anything.
Spending your energy coming up with reasons why things are the way they are does nothing to change the situation.
Not only that, but it also distracts you from what could actually solve the problem and change your situation: getting in action!
If you want to make progress toward financial success, financial freedom, and financial stability, stat by accepting the fact that what’s done is done, and you cannot change “what’s so,” or what is right now.
The present moment is your reality, and it’s the one you’re going to move forward from.
Drop these useless exercises and thought patterns:
- Dwelling on past money mistakes
- Ruminating over what you could have done differently but didn’t
- Coming up with reasons for why your situation is the way it is
- Making excuses for continued poor habits and bad financial behavior
- Assuming everything that happens to you is someone/something else’s fault
- Feeling guilty over money decisions
The circumstances of right now are what they are. Acknowledge it for what it is — without making excuses for it! without making up reasons for why it’s like that! — and then take action to change moving forward.
Finding Reasons Does Nothing to Get You Financially Un-Stuck
Once you can be honest with yourself about what’s so, forget about the reasons why the situation is the way it is.
Most of our reasoning only serves to make us feel justified about why we are where we are.
It doesn’t do anything productive or create what we really need: change. Action. Forward progress.
The first thing to fulfilling a bright financial future is making the commitment to stop dragging your financial past with you everywhere you go.
Acknowledge what is and then look at how you can act to change it.
Your Action Plan for Creating Positive Change and Moving Beyond Feeling Financially Stuck
Once you actually acknowledge that a particular area isn’t working, you immediately have access to what’s possible in that area. Here’s a specific process you can use to actually do that: to stop thinking and start acting.
1. Identify what’s not working: Note I didn’t say “figure out what’s wrong” or “find out who is at fault.” This isn’t about being wrong or assigning blame.
It’s simply about what doesn’t work, meaning, what isn’t productive, helpful, useful, or valuable to you.
2. Clearly articulate what doesn’t work. Being in debt doesn’t work. Overspending doesn’t work. Not saving or investing for what’s important to you or your financial future doesn’t work.
What doesn’t work in your life might look different, but it’s important to state what it is so you know what you’re dealing with.
3. Acknowledge the consequences. Everything has an impact. Whether it’s positive or negative, the things you do in your life create a ripple effect. What do those ripples look like?
After you get clear on what doesn’t work for you, consider the impact it’s currently having on your life. What is the impact of dealing with debt? What is the impact of ignoring your saving and investing goals? What are the current consequences — and what will they be if you continue to do what you’ve been doing?
4. Consider what you can do next to change the situation. Look at what positive, productive, useful action you can take next instead of dwelling on what just happened or is part of the past.
Don’t limit yourself to what you think is possible. Writing down actions that sound ridiculous might actually expand your thinking and open up new pathways to get results.
Make a plan to act in a way that moves you forward (rather than keeping you financially stuck) and addresses the potential consequences you identified.
5. Choose the most appropriate actions and get to work! Appropriate actions are the ones that will alter the circumstances the quickest.
Be direct and don’t avoid certain actions because they make you feel uncomfortable. Those are typically the most effective actions to take.
This process is simple and extremely effective if you can sit down and go through these steps with intention and deliberation.
Simple, however, doesn’t necessarily mean easy — and you might find it’s tough to get through on your own. Don’t hesitate to reach out for support.
Use resources that provide guidance and accountability to help you stay on track and committed to the process. For some people, that resource can be a spouse, partner, or friend. Others turn to online communities or forums.
And of course, the people playing at the very top of their game turn to a certified financial planner to provide that professional level of coaching, advice, accountability, and support.
About the Authors
Eric Roberge is a CFP and founder of Beyond Your Hammock, a fee-only financial planning firm that helps professionals in their 30s and 40s use their money as a tool to live well today while still planning responsibly for tomorrow.
Do you know XYPN advisors provide virtual services? They can work with clients in any state! View Eric's Find-an-Advisor profile.