Always Short on Cash? 3 Reasons Why.


This post previously published on December 5, 2014.

Are you short on cash at the end of the month? Always falling short of your financial goals? Sometimes we chalk this up to circumstance, but let’s face it: it’s really due to our money habits. Don’t believe me? Let’s take a look at some common pitfalls and how to avoid them:

1. You Compare, Then Despair. If you try to keep up with the Joneses, you end up losing a sense of who you are and what you value. Understanding you can have anything but not everything will help you put your money toward designing a life that best reflects your values.

2. You Gamble by Betting on the Future. There are a lot of future scenarios you can conjure to justify spending money you don’t have. Sure, there may be a strong possibility that you’ll land that high-paying gig or get that raise next year, but spending money that has yet to materialize just puts you further in the red. Instead, create a budget with Mint or LearnVest based on your actual income and learn to live within your means.

3. You Succumb (Too Often) to Retail Therapy. Do you have a bad day and seek relief by buying things? It has never been easier to spend money on stuff you don’t really need. Studies have shown that online shopping can momentarily boost your mood, but it isn’t worth what it does to your bank balance. Next time you need an emotional pick-me-up, do something that doesn’t involve swiping your credit card, such as going for a bike ride or playing video games with friends.

Now what do you think? Our desire to spend can be incredibly powerful, but spending rarely provides the solution we’re seeking. Take that first step by examining your spending habits or meeting with a financial professional at your local credit union. Even the smallest changes in your behavior can help get you on the path to long-term financial success.