What do we do when there is not enough money to have what you want or even need to live on. Most people have seen this situation at some point in their life. The question is what to do. We all know the options:

1) Put it on credit card or take out a loan

2) Resign ourselves to the fact that we can not afford it and thus give up the idea of having it (hopelessness)

3) Figure out a way to pay for it (work overtime, wait until we can afford it or save money by cutting back somewhere else in the budget).

We know people (maybe even yourself) that have done one of the first two options. When money is a struggle it is easy to fall into one of the first two solutions. This is dangerous because the interest rates on credit card debt (and pay day loans) can put you behind the 8-ball and because a state of hopelessness is resigning ourselves to thinking we can’t get what we want (or need) so why even try. If we take one of these first two options, we are backing ourselves into a corner with no way out. If we take on too much debt at high interest rates, we are giving up what we want in the future due to money being allocated to debt payments (especially for interest payments). If we resign ourselves to giving up what we want, we give less energy because we see the situation as hopeless and thus we receive less abundance in the future by giving less.

So what can be done? The answer is in the third option of determining a way to get what we want (or need). It doesn’t mean that we will necessarily get it; however, we have a belief that it will and work towards our goals. I know that it is easier said than done, the trick is:

1) See beyond hopelessness

In being in a place of hopelessness, there is a deadening of energy. Money is energy. When our energy is drained, the flow of money slows down. Thus, it is important to see beyond the current situation and have a knowing that everything will work itself out in perfect order.

Note, I did not say “hope” for a better future. Hope puts into question that things will work out in the future. Per the law of attraction, we get what we think about whether we want it or not. If we think that something may not work out, we can be setting ourselves up for it not to happen. In simple terms of the law of attraction, this means when we see an event as possibly not working out, it is giving ourselves permission to give up hope at the early signs of failure and give up because we knew that it possibly would not happen. By having a knowing (instead of hope), we are prepared to work through the initial set backs to attain our ultimate goal and outcome.

2) Change our circular beliefs

Sometimes life seems like a hamster wheel. We keep on working harder and harder while not feeling like we are getting anywhere. We get in a cycle where we are doing the same thing over and over again and expecting a different result. Part of it is also thinking that life should be a certain way (for example, money should be a struggle) thus we do not see that there is an alternative, and thus money continues to be a struggle.

We need to step back and take a fresh look at the situation to see what can be done differently. We need to challenge our beliefs to see if there if there are alternatives. Maybe money is a struggle, yet does everyone seem to be struggling as much as you are? Maybe there is an easier way where money that is less of a struggle. If you think money is a struggle, you are less likely to take a step back and explore all the different options to make your financial life easier because deep down you believe that this is as good as it gets.

3) See the opportunities (brainstorm)

Even though this sounds very easy, it may be harder than many people think because we know what we know and we don’t know what we don’t know. The opportunities that we see are same ones we always see. The key is to start seeing differently for new opportunities. This is where we need to see what others are doing or see something totally new.

This is hard though because we have a tendency to hoot down ideas before they even get launched. This can be due to having a disbelief/hopelessness as discussed above. It also can be due to thinking that an idea about money can affect our self-worth. Look at the flap that Northwest Airlines got for sending “101 ways to save money” to laid-off employees. The employees did not take well to the idea of dumpster diving because they saw it as an insult rather than an idea that there are great finds depending where you look (e.g., thrift shops). For more, see Do you dumpster dive?.

So before dismissing an idea, see the merit in it and see how it can be modified to be a great idea.

4) Put things into perspective

Money has a prominent role in our society. It seems like we can not live without it. Yet, money is only money. It comes and it goes. It is important to remember that there are more important things in life than money (love, happiness, joy, peace, friend, family, health, etc.). And, what you are going through with money is only a temporary setback and not a reflection of who you are.

5) Be aware what you feel (guilt, shame, lack of self-worth) – don’t let these emotions cloud your judgment

What does it mean if you can not afford what you want? Does it affect how you feel about yourself? We buy things sometimes not knowing the real reason we are doing it for. Emotional shopping plays a large part of this. However, we usually do not recognize it until it too late, after the shopping spree. So take a breath and ask yourself how you feel. Does watching others who have things that you want and can not afford, make you feel depressed or angry? If so, recognize the feeling and avoid shopping until the feelings pass. They say not to go to the grocery store hungry or you will buy more. The same goes for going shopping while depressed, angry or upset.

6) Really know what is a need vs. a want

I have written about this before where we get confused on what is a want instead of a need. Many needs we have today are really wants (for example, cellular phones, air conditioning, dish washer, etc.). There are no problems with having wants, as long as we know that we have a choice over what wants we have instead of buying it because we believe it is a need. We see life in a whole new perspective when we see we have power of choice (of wants) instead of when we see our struggle of just getting by on only needs.

7) Know your actions today affect you tomorrow

Understand the consequences of your actions. Will buying what you want tie your hands in the future? How much will you need to pay on credit card debt? Are the future consequences worth your current happiness for having what you want now? Know that if a vacation is 5% of your budget and you decide to finance it, it is just pushing the payment until later along with possibly a large amount of interest. Thus, you may be limiting your options in the future if your debt burden becomes too large.

These steps may be good in theory, yet what does it really mean in day to day life. As an example, imagine wanting a vacation to Hawaii that will cost $3,000 yet you do not enough money (alternatively this could be $300 for a car repair). You may think that your choices are:

1) Put it on credit cards

This may end up costing you $6,000 when interest is factored in (or $600 for car repair)

2) Give up hope –

By giving up hope of having a vacation or car repair may lead you to be disgruntled at work because they are not paying you enough for the vacation (or car repair). Your boss seeing you disgruntle makes a note that you may not really want to work there which he will remember the next time he is forced to let someone go due to cutbacks

3) Work through the situation

a. See beyond hopelessness

Know that you have a choice to take this vacation to Hawaii (this car repair) if it is what you really want (or need), yet you need to look at the options first.

b. Change your circular beliefs

Know that money does not need to be a struggle. You can get the extra money for this vacation or car repair if give up your disbelief that it will happen. If you believe that there is not enough money for the vacation, then you are right because you will not see options (give up in hopelessness).

c. See opportunities

Put your budget on a piece of paper and see what you rather give up to have the vacation (e.g., cut back on eating out or delay buying that new car for a few more years to save money) or you may decide to work overtime knowing the payoff at the end is the vacation in Hawaii. For a car repair, you may have to give up going to the movies or eating out to pay for it, for now.

d. Put things into perspective

As you see your friends take exotic vacations, you may feel down that you have to delay your trip, yet would you rather spend time with the family at home versus taking the vacation and end up stressing over how to pay for it the whole time you are there? For a car repair, remember that it is a temporary set back that you can overcome.

e. Be aware of your emotions

As your friends take a vacation, your self-worth may be low thinking that you can not provide for your family as well as they can, avoid making a financial decision from this space because it will lead you to problems. This includes getting a car repair because if you are stressed on making ends meet, you may over look that fixing the car can cost you more than going out and buying another used car.

f. Really know what a need vs. want is

A vacation is still a want, yet some people are blurring the line thinking that they can not be happy without it thus makes a vacation appear more of a need. A car repair may be more of need than a want. Yet there are alternatives like living on one car and carpooling.

g. Know how your actions will affect you tomorrow

If you put a vacation (or car repair) on a credit card (and not pay it back immediately), you are not only putting future vacations at risk because your vacation now is using up money for future vacations but also putting more at risk because you are paying interest. This reduces your future flexibility because you are required to pay more of your future income to credit cards with little or no choice anymore.

You may choose not to take a vacation or may decide putting off making the car repair because you do not have enough money. Yet, making the choice from alternatives gives you control over your finances. It gives you more power to make things happen in the future. You may decide to save a little each year until you can afford your dream vacation. Alternatively, giving up in hopelessness just keeps your hands tied and will keep you from getting what you want.

This entry was posted on Monday, February 12th, 2007 at 3:28 pm and is filed under Budgeting. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.