Take Responsibility for Your Money Problems

Do you have money problems? A bad credit score, perhaps, a low income, or crushing debt payments to make each month? It’s easy and all-too-tempting to blame the government, credit card companies, or maybe even your parents for your troubles. But many people fail – or pointedly refuse – to consider the part they play in creating their financial problems.

As this MSN Money article on the subject points out, the problem with making endless excuses and blaming others for your situation is that you render yourself powerless to improve it. After all, if your problems are beyond your control, then there’s nothing you can do about them, right?

Here are some examples of when your money problems are primarily your own fault:

  • You took out tens of thousands of dollars of student loans in order to get a degree that you should have known would provide a low salary.
  • You racked up credit card debt in order to travel, buy clothes, eat out, and purchase other non-necessities “because you deserve it.”
  • You have no concept of a budget. You signed up for all your fixed expenses (rent, mortgage, loan agreements, cable, etc) without even calculating how much of your take home pay would be leftover after making those payments. Now you can barely afford food and gas after paying your bills.
  • You failed to get adequate insurance and then got slammed with “unexpected” medical or auto bills.
  • You have never checked your credit report and are therefore unaware of past due bills, errors, or other factors that have trounced your score. Now you can’t get good rates on loans. Even worse, you’re oblivious to what rates you’re paying and to whether or not they are reasonable.
  • You took on more debt that anyone with your income could ever handle, and now you can’t pay it back. Collections, foreclosures, and/or bankruptcies have ruined your credit. Now you can’t get a loan and you might even be denied housing and certain jobs.
  • Despite your relatively high salary, you spend everything you make and have failed to set aside any cash reserves for unexpected expenses.
  • You choose to live in a high cost of living area. If you have money problems and still insist on living in NYC, LA, or any other expensive area, then you can’t blame anyone but yourself.
  • You work for minimum wage. Yes, this is your own fault, not your employer’s or the government’s. Few jobs actually even pay minimum wage, contrary to popular belief, and the only people who should be working those jobs are those who have been in the workforce for less than 6 months. If you haven’t gotten a raise by then or switched to a higher paying job based on your newfound experience/skills, then it’s your own fault for being a bad employee, being ignorant to your options, or insiting on living in an area with no other jobs.
  • You work less than 40 hours a week and/or do not even have a job. If you have serious money problems but aren’t working for whatever reason (you’re in school, you’re too proud to work an entry level job, you have a criminal record), then you can’t blame anyone else for your money woes. FYI, a surprising majority of “poor” households in America work less than 25 hours a week combined. No wonder you can’t pay your bills.
  • You are addicted to alcohol, gambling, drugs, cigarettes, or anything else that sucks up your income and/or negatively affects your ability to earn money. [I found out on Oprah yesterday that a pack of cigs in Chicago averages $7 a pack! Wow.]

Ok, I KNOW a few of those might bother some of you, especially the “working for minimum wage is your own fault” one. You don’t have to agree with me; I’m just sharing my widely held, non-politically correct perspective. It’s not like I added “having children when you’re single and/or have no job skills” to the list. Actually that one probably should be up there…

I’m not unsympathetic to those with financial problems. We all have them at some point, and sometimes there are justifiable reasons for them. I know that things cost more than they used to, credit card companies can change their rate abruptly, student loans are tough to repay, health care costs are soaring. Maybe your parents didn’t teach you to handle money; you may even have been lied to or defruaded. Money problems can also stem from illness, disability, and various mental problems.

Too often, though, money problems are the result of personal disorganization, laziness, lack of motivation/work ethic, lack of impulse control, ignorance, negligence, immaturity, or some combination of factors over which you have or had control. In these cases especially, there’s no excuse for playing the victim and refusing to improve your financial situation.

Yes it might be hard, and yes it might take some time, but we can’t expect anyone else (especially the government) to educate us, to prevent us from making bad decisions, or to fix it every time we get in trouble. We can realize that we live in the best country in the world where taking initiative, getting educated, and working hard are relatively straightforward paths to success – or at least to financial stability and comfort.

Thankfully there are a lot of counselors, social programs, and support networks out there if you need a little help getting started. All you have to do is recognize the part you play getting into financial trouble in the first place and take responsibility for finding your own solutions. Only then you enable yourself to succeed and to avoid those problems in the future.

More from Meg at The World of Wealth

Do You Know Your Stuff?

I was watching Fox Business News yesterday and one of the segments featured an interview with a lady from the Insurance Information Institute (www.iii.org). They were talking about the fires going on out in California and what people should do to help prepare themselves should they lose everything. One of the things the lady suggested was to use Know Your Stuff, which is a program that users can download FREE of charge. The program is designed to help users keep track of their belongings.

I think this is a great idea. Another great idea is to go through your house inch-by-inch with a video camera. The video can be used as a reminder of what exactly you had should you ever lose anything in a fire or some other disaster. Just be sure that you keep a copy of the video in your personal safe or safe deposit box.

Finally, one other thing the lady from III suggested was making sure your insurance is updated when you make a large purchase. Yes, it will mean an increase in your premium, but it will also mean that you’re covered.

My Homeowners Insurance Renewal: OUCH!

I received the first draft of our homeowner’s insurance policy. Our premium went up to $1,823, a 19% increase over last year’s premium of $1,528. Oh, and they added a new 2% deductible for wind damage, which would put us on the hook for the first $4,652 in damages if our home received any wind damage.

My first, quick-tempered reaction was, “What the hell do I have insurance for?” I realize that’s an immature response but consider this:

I remember putting on an entire roof with architectural shingles just a few years ago for $200 less than that deductible! I’m sure that roofing materials have gone up in price since then but I’m not sure how much.

This is what stinks about insurance. We have been in our house 8 years, NEVER filed a claim, and yet our rates keep going up. Of course it doesn’t help that we live in an area that was hit particularly hard by the mold BS that happened several years ago. It also doesn’t help that we suffered a hurricane in 2005. Still, these rates seem a bit extreme especially when you consider the fact that our premium was around $850 per year not too many years ago.

My insurance agent is working on getting the limits of liability reduced, which should drop our premium and deductibles some (the deductible is a percentage of the limits of liability). I’ll let you know what the final premium is as soon as I find out.

UPDATE: I guess it could always be worse.

JLP’s Hurricane Plan

I moved to Texas in June of 1992. By September of that year, I had already experienced my first evacuation for Andrew (I think). At the time I was an employee of a grocery store. I remember the day that everyone was to evacuate was supposed to be my day off. I got called in to work. The store was a nuthouse. People were frantic, clearing off shelves and fighting over bottles of water. It was crazy. My canned good isle was decimated.
Continue reading JLP’s Hurricane Plan