9.5 MIN READ
As financial planners, we hear all sorts of reasons about why people’s finances are the way they are… especially when they seem financially stuck.
People always have a reason, an explanation, or a story. It’s only natural: we need to assign meaning to what happens in our lives. The thing is, when things go our way, we tend to take credit.
But when we’re not coming out ahead? When we’re starting to feel financially stuck and aware we’ve stopped making progress?
Then we start throwing out reasons that revolve around external factors, like:
We have $10,000 in credit card debt because my wife lost her job.
I lost a lot of money in my 401(k) because I didn’t know my investments were too aggressive.
We stopped contributing to retirement savings because our home renovation went overbudget.
We needed more space, so we had to pay over asking on the new house.
These reasons might also be known as excuses. It’s hard to hear, but when you’re financially stuck, you don’t need any sugarcoating. You just need to find forward progress again.
The reality is, there will never be any shortage of reasons why things are or are not how we want them to be. There’s always something that prevents you from being where you want to be… whether that’s just an excuse or a real roadblock. Sometimes, you really do run into bad luck or negative outcomes due to forces beyond your control.
But dwelling on the “why” doesn’t do much to get us out of the situation. Instead, we need to focus on calmly and objectively assessing the what: what’s happening right now, and what we can do about it in the moment. From there, we can move on to how we make change.
Focusing on an Explanation of “Why” Won’t Help If You Feel Financially Stuck
First, it might help to understand that it’s human nature to look for reasons for everything. We’re meaning-making machines!
If our brains don’t immediately pick up on an obvious reason for something that makes us feel good about the situation, then we’ll just make one up and happily believe in it.
Our brains need reasons so badly that even if a logical, casual explanation does not exist, our minds will supply one for us. We’re so dependent on reasons that we often obsess over them instead of looking at what would actually help the situation.
This is why we shouldn’t spend too much time with the “why.” It’s not that it’s unimportant, but that dwelling here can keep us stuck.
Reframe How You Interpret Events That Happen
It’s really hard to move on, however, when you sincerely feel you are not at fault; that something about the situation is not fair.
Take that first example from the top of this post: We have $10,000 in credit card debt because my wife lost her job.
You could take that and say, “of course this isn’t my fault! I didn’t want to lose my job; I didn’t have a choice about that. I was laid off.”
Is that what actually happened or merely one interpretation of events?
For the sake of your financial power, let’s zoom out instead of focusing on this one specific event that can happen in your life.
What if what happened here was actually that someone’s wife lost their job, and:
- They never tracked their spending or budget carefully, and as a result they formed a habit of spending everything they earned each month and failed to guard against lifestyle creep.
- They occasionally dipped into savings to cover an expense here or there when they spent more than what they earned, because they didn’t use a system to manage their personal finances.
- They saved a little to retirement accounts, but never bothered to set more money aside when employed to create an emergency fund.
When you add in some context, the couple in this example didn’t go into debt because one spouse was out of work.
The reason for the debt was a combination of poor spending habits, lack of awareness, and an unwillingness to make necessary but tough lifestyle changes to get through this period of time where the household earned less income.
They were already skating on the edge of financial irresponsibility, and a bit of bad luck caused them to veer very far off course.
(This is also a great example of why you need to build a bulletproof balance sheet – so that when things inevitably don’t go your way all of the time, you can withstand that blow without getting stuck or being forced to backtrack.)
Coming Up with “Reasons Why” Is Detrimental to Progress
If you only focus on the “why” part of why you feel financially stuck, you’re more likely to stay put. That’s true even if you did truly do nothing wrong but still find yourself treading water and unable to make progress.
Spending your energy coming up with reasons why things are the way they are does nothing to change the situation. Not only that, but it also distracts you from what could actually solve the problem and change your situation: getting in action!
There’s a difference between what is your fault and what is your responsibility. If you’re willing to take responsibility for how you respond to an event, you’re on your way to getting unstuck. It will help if you drop these useless mindsets and thought patterns:
- Dwelling on past money mistakes
- Ruminating over what you could have done differently but didn’t
- Coming up with reasons for why your situation is the way it is
- Making excuses for continued poor habits and bad financial behavior
- Assuming everything that happens to you is someone/something else’s fault
- Feeling guilty over money decisions
The circumstances of right now are what they are. Acknowledge it for what it is… without making excuses for it! without making up reasons for why it’s like that! Then take action to change moving forward.
How to Honestly Assess Your Current Situation
If you want to make progress toward financial success, financial freedom, and financial stability, stat by accepting the fact that what’s done is done, and you cannot change “what’s so,” or what is, right now.
The present moment is your reality, and it’s the one you’re going to move forward from.
So start with what is happening. What is the situation right now? Take stock of where you’re at financially, and be honest in your assessment. You might consider asking yourself:
- What does my cash flow look like? Am I spending well below my means? Am I carefully tracking my spending?
- Am I saving consistently? Do I have a system in place to help support good financial habits?
- Am I accruing debt, or failing to pay down my current balances?
- What does my investment strategy look like? Am I on track with the actions that strategy requires, or am I failing to stick with it?
- Am I consistent in my actions, or does my money management style look more hit-or-miss?
- Have I gotten clear on my values, my priorities, and my longer-term goals?
- Do I understand my financial plan, and how the various pieces of my financial life fit together?
- Is there anything about my finances I’m avoiding (out of fear, stress, uncertainty, or overwhelm)?
- Where do I need help? What is outside my realm of knowledge? How will I check my blind spots and uncover the things I don’t know I don’t know?
There are no wrong answers here, and there shouldn’t be any judgment of how you respond to questions like these.
Again, the point here is just an honest assessment: where am I standing today? Does this position put me on course or off track to where I want to go in the future?
Acknowledging what is and isn’t working is a critical step in understanding how to correct any issues and move past the feeling of being financially stuck.
Your Action Plan for Creating Positive Change and Moving Beyond Feeling Financially Stuck
Thinking through your situation is important, but it’s also another place you can get and stay financially stuck. Eventually, you need to translate your assessment of your situation into an action plan for moving forward, correcting mistakes, and building upward from here.
Consider this 4-step process:
1. Identify what’s not working: Yes, we covered this already! But we should also clarify that this step is not to figure out what’s not working. First, simply need to identify potential issues, challenges, or roadblocks.
2. Get clear on your priorities: Before you even consider what you can do to get financially unstuck, you need to make sure you understand what’s most important to you.
Clarifying your values and priorities gives you a framework to work within when you need to make hard choices and tradeoffs. When you understand your top priority, making financial decisions gets a little easier. For any action you consider, you can ask yourself: does this get me closer or farther away from my number-one priority?
If an action moves you closer, it’s worth considering. If it doesn’t help you make progress toward a big goal, staying true to your values, or what you’ve identified as the most important thing to you… then it might not be the best move. At the very least, you should give it more thought, and acknowledge that it could create a detour from where you really want to be.
3. Consider what you can change: Look at what positive, productive, useful action you can take next instead of dwelling on what happened or is part of the past. What is within your control to do, or within your sphere of influence to alter?
A note for brainstorming: Don’t limit yourself to what you think is possible. Writing down actions that sound ridiculous might actually expand your thinking and open up new pathways to get results.
Everyone’s situation is different, but here are some common and simple solutions that almost always improve your personal finances:
- Reduce your spending on discretionary items (things like entertainment, meals out, travel, and shopping). This doesn’t have to be a permanent reduction, but cutting back at least temporarily can help you regain control of your cash flow.
- Make sure what you do spend aligns with your values. Cut out puchases that don’t.
- Increase your savings: build an emergency fund, contribute more to retirement plans, or pad your taxable investment account.
- Get organized. Keep a budget (as tedious as that sounds, it works!). Create systems or frameworks to make sure the day-to-day activities of managing your finances stay on track. Automate what you can.
- Commit to getting rid of (bad) debt. This could be credit card debt, a car loan, or possibly even student loans. Create a debt repayment plan and stick with it.
- Create a financial plan so you can start getting proactive and going on offense, rather than being reactive and trying to defend as things happen to you.
Again, these are some common potential solutions, but this list is certainly not exhaustive. These are universally and generally good ideas, but the best action for you will be highly tailored to your circumstances and address your acute needs.
4. Think about what you can stop doing. When searching for solutions, we tend to gravitate toward what we can start doing, or what we can add into the mix. But subtracting, or stopping, can be just as if not more powerful.
To stop feeling financially stuck, you may also need to stop:
- Comparing yourself to others
- DIYing your investment management (and making avoidable mistakes along the way)
- Ignoring your finances or putting off important tasks until “someday”
- Wasting time and energy trying to do everything yourself, when you could outsource some of what’s causing you stress and worry
5. Get an outside perspective. Part of the reason you may feel financially stuck is that you simply don’t know what to do next. That’s not a problem; in fact, knowing when you don’t know something shows self-awareness and wisdom.
To move forward, though, might take more than just your own brainpower. So don’t hesitate to get help and support, either from likeminded folks who are passionate about figuring out and improving their finances or from professional planners and advisors.
Use resources that provide guidance and accountability to help you stay on track and committed to the process. For some people, that resource can be a spouse, partner, or friend. Others turn to books, online communities, blogs, or podcasts.
All of these can be helpful when you’re just getting started on your journey to financial success, or when you have a relatively straightforward situation.
Relying on what you can teach yourself (or what your peers can share with you), however, might not be sufficient when you reach a critical threshold of complexity within your financial life.
At that point, it’s worth considering a professional team to ensure you maximize your financial opportunities and protect against potential threats as you grow your wealth. You might consider a certified financial planner if you want a professional level of coaching, advice, accountability, and support.
How can you tell if working with a financial planner is just the thing to get your financial life in gear? If you…
- Want support and clarity around your financial decisions, especially as your life expands and things feel more complex
- Feel tired of second-guessing and doubting your decisions; you’re suffering from analysis paralysis and you know you need to act, but just can’t commit without knowing the “right” answer
- Value being proactive and having a plan, but feel lost without a specific strategy to follow
- Are trying to strike a balance between enjoying your lifestyle now while also establishing a secure financial future, but struggle to figure out just where that balance is
…then it’s likely time to consider getting a professional team on your side so you can maximize your opportunities, minimize mistakes, feel confident about your financial choices, and fully enjoy your money today knowing you’ve secured your financial future.
About the Author
Eric Roberge is a CFP and founder of Beyond Your Hammock, a fee-only financial planning firm that helps professionals in their 30s and 40s use their money as a tool to live well today while still planning responsibly for tomorrow.
Did you know XYPN advisors provide virtual services? They can work with clients in any state! View Eric's Find an Advisor Profile.
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