A few months ago Congress has reached a 2-year budget agreement. This $1.3 trillion budget deal will make things easier for us now but pushes our national budget crisis off on future generations. This week they implemented the first part of this agreement to help keep the government open, and it goes against every piece of advice I’ve given my clients.
The Deadly Sins Of Money: Avoidance And Denial
The budget decisions made in Washington are perfect examples of the way people avoid and deny their money problems until it’s too late.
Avoidance involves turning a blind eye to your money problems, hoping things will go away and solve itself before it becomes an inconvenience for you.
In our government, we can see this with the way our politicians continue to ignore government entitlement programs. These programs, such as social security, contribute to 2/3rd of our spending, but instead of addressing the broken system, lawmakers avoid addressing it, in fear of losing their seat.
We also see our politicians denying that we have a financial crisis in this country. When our solution to excessive debt is spending another $1.3 trillion dollars, you know we’re in denial. These agreements even ignore caps we put in years ago to prevent overspending just like this.
It reminds me of a family in massive debt. Instead of sitting down and making the hard choices to fix their problem, they say, “Grab the credit card. We’re going to Disney World!”
WARNING! Self-Reflection Ahead...
Of course, it’s easy to look at these mistakes a federal level and shake your head, but I have clients come in every day who make these same mistakes. In fact, one of the first things people say when they come in is “I’ve been thinking about doing this for a long time.”
Instead of just coming in and solving our problems, our first instinct is to push them to the back burner and hope they don’t come up again. It’s hard to sit down and look at your financial situation. The problem is that avoiding it just leads to more and more problems.
Not long ago, I had clients come in. They had a great income, were close to retirement and had a lot of debt. They were also some of the sweetest clients I’d ever worked with. That made it even more difficult when I told them they wouldn’t be able to make it through retirement with their current spending habits.
They had large monthly expenses, little assets and weren't doing enough to bring down their debt. It was definitely possible for them to be okay, but they’d have to make some big changes. I took the time to show them what sort of hard choices were coming up and the wife broke down crying. It was heartbreaking. Instead of asking questions, the husband said they had to leave and they’d be in touch.
It was clear that weren’t ready to face the reality of their financial problems. Instead, they wanted to avoid these issues, sweep them under the rug and hope they didn’t pop back up. I never heard from them again.
Don't Ignore It, Fix It
On the other hand, I have another couple in a very similar situation. I told them the changes they would need to make and how hard it would be. But they didn’t run away, they actually made these changes. It took time and a lot of hard work, but they came out the other side more successful and confident. They even told me that some of the changes they made had made their relationship happier and more enjoyable too.
Avoidance and denial are dangerous strategies in financial planning. They create stress and anxiety, even if it gives you short-term relief. The good news is, you don’t have to hide. Set up a free consultation with us and we’ll walk you through the changes you can make to get out of debt and unhealthy spending habits. Together, we’ll make sure you get to happier and healthier financial future.