Financially sabotaging myself

[walkingblind]

I am not stupid. I want to make that clear because I often feel that way when I sabotage my finances and I don't know why I do it.

I understand financial concepts. I know how to save money and I understand all the good advice that can be found in these forums. But despite all that, I find ways to sabotage my finances just when I think I'm going to finally get then in order.

I had finally saved up a $1000 emergency fund that I knew that I needed. I felt relief knowing that money was there and it was important for me to have it there. Then a friend asked me to go on a trip with her. I knew that I couldn't afford it and that I should say that I couldn't go. But I did and I spent the entire emergency fund. Even worse, I didn't even enjoy the trip because the whole time I knew what I was doing was wrong and that I would have to start the emergency fund all over again. But I still did it any way and I can't explain why.

This is just one example of how I constantly sabotage my finances after making progress on them. I think I may have a financial sabotage gene in my body. Is there anything I can do about it and does anyone else have a similar problem that they are fighting?

[simpletron]

the harder and/or more annoying you make accessing the money, the less likely you are to spend it. like create a CD ladder that has fees for early withdraw, it will make you think twice about spend it early because it cost you. while I was in college, I kept I-bonds in my parent's safety deposit box. If I had to access them, the first question out of parents' mouth would have been, "what are you spend this on?", so I had to have a good reason to spend it.

[skydivingchic]

A couple thoughts. First, do you allow some kind of spending money/entertainment money in your budget? Completely depriving yourself of fun money will lead to sabotaging your budget much like a dieter who completely deprives themselves of their favorite "bad" food will likely end up binging sooner or later. If you allow some amount of money to be spent however you want, it will help you in the long run.

Second, as simpletron said, make the money hard to get to. Like a seperate savings account or a CD ladder.

How about setting up a rewards system for yourself. Once you save $1000 in your EF, the next $50 you save can be used to purchase something you want. Set milestones along the way to a fully funded EF (or whatever your savings goal is) and set rewards which will motivate you to achieve those "mini-goals." If your reward is say a nice dinner out, put a picture of the restaurant somewhere you will see it to remind you what you are working toward. Also put up a poster with one of those goal thermometer drawings and mark off your progress.

Ultimately it comes down to an attitude and behavior change. You have to decide for yourself that the savings goal (whatever it may be) is more important to you than spending money on trips or nights out or whatever. You can listen to advice on sites like this all you want, but until you make the change for yourself, that advice is useless.

[wincrasher]

Actually you are stupid. You knowingly did something that will make your situation worse, not better. You are a grown up. You are the only one who can control what you do. Take charge of yourself. No tricks or gimmicks will work.

[Runaway Finances]

Skydivingchic is right on! You have to be able to reward yourself periodically or you will get tired of any budget. I think most people "sabatoge" their finances because they don't have any real, hard and fast goals. It is easier to save when you are saving for a specific purpose. That is why some advisors recommend "envelopes" which is just putting money in different pockets or places. I generally recommend different accounts for different purposes. For example, have a "tax account" that is only for saving for taxes; a "car account" for saving for cars and car repairs. If you have a purpose for the money, you will be less likely to use it for some other purpose. You need a "fun account" for trips and things you want. Then you won't beat yourself up when you spend the money in that account.

It just occured to me that we are all talking about and advising about saving money for this or that. Don't forget to use some of your money to help someone out who has greater need than we do! There are alot of people out there that need help too. Just look around!

[ActYourWage]

You are not stupid, you just did something stupid. We all do. Just get back on horse and give it a go again.

[parafly]

Exhibit some self control. You are an adult and fully aware of your actions.

[disneysteve]

You aren't stupid. You are human. We sometimes do stupid things even though we know better. Don't beat yourself up about it. Just don't let it happen again. Making a mistake is perfectly normal. Making the same mistake over and over is not.

[Staceyy]

I find the way to get around this, is to pay my bills ahead instead of keeping the money in an emergency fund. You can pay your rent or mtg, car loan, utilities ahead etc. You can also stockpile food. You can also start saving your change. I save about $500 a year by doing this. You won't be too tempted to lug a heavy jug of coins on vacation with you.

[rizzmo]

I have to disagree with pre paying your bills. You essentially let other people borrow your money for free. Making the money less accessable, in my opinion, is a much better solution. CD's work well for this. Don't stress to much about the splurge, just put a system in place to prevent it from happing agian.

[EEinNJ]

Part of you is rebelling against having self-control and good judgement.
The easy fix (and we all like these) for the example you gave is, just save more money. If you had $2000 and you spent that $1000, it wouldn't be so bad. In other words, budget for more than just an emergency fund, like Runaway said.

[cantretire]

I agree with the previous posts - allowing some money for fun and forgiving yourself when you slip.

I found I did so much better when I stopped looking at saving as a 'chore' or a 'burden'. Once I got started, I started getting a big thrill out of watching my accounts grow. I started setting small goals. As I reached them, I increased them a little at a time. It's really quite enjoyable to watch those numbers go up, while your debt, if any, goes down.

Last January I was laid off. The savings allow me to live fairly comfortably with much less stress than if I had nothing put aside.

Make it a positive challenge. You'll enjoy it then!

[maat55]

You have to want financial peace more than you want the stuff. You have no discipline and never will until you change your mindset on why you save.

I don't know how it happens, but when you are in the right mindset, IMO, you will not desire things that impead your plan.

[Staceyy]

I have to disagree with pre paying your bills. You essentially let other people borrow your money for free. Making the money less accessable, in my opinion, is a much better solution. CD's work well for this. Don't stress to much about the splurge, just put a system in place to prevent it from happing agian.

Initially I also thought I would be letting people borrow my money for free, but everyone has given me a discount for paying ahead, even the utility companies and my car insurance. Paying the mortgage ahead reduces the interest I owe. I don't recommend this strategy for everyone, but I find it works to keep me from blowing extra money lying around, and ensures I'll be taken care of for awhile if something adverse happens without resorting to taking money from our 401k. Even if people would be borrowing your money for free, its better to have them do this and you have a roof over your head, utilities and a car, than risk blowing your own money foolishly on vacations and finding yourself out on the street with no money.