No matter how much we plan our finances, things can happen that we don’t expect. In fact, that’s one of the reasons to plan. It’s ok to give yourself some leeway in unusual circumstances, but if it becomes normal to have something “unusual” in your life that gives you an excuse to ignore your plan, you need a new plan. There are a few common excuses that can derail your financial health.
The holidays – December is usually a financial drain for folks. Gift giving, parties, and sometimes having slow business activity can all contribute to the year end being a tough financial time. Avoid the impact of the financial strain by planning for it. After all, it’s not as if you don’t know when December will happen. Consider putting some extra money in savings each month to cover the holiday expenses. Perhaps buy gifts throughout the year. Or have a solid plan for spending as you go into the holidays and stick to it. If you’re cringing as you look at your credit card bills this month, you’ll benefit from planning for the end of 2019 right now.
Kids – If your kids are young, you’re teaching them financial responsibility with your actions even more than with what you tell them. They can learn financial lessons through painless and empowering choices. You can ask your pre-schooler if she’d rather have an ice cream cone or a cookie at the mall. That lets the child know that we don’t all get everything all the time, but we have choices. It also teaches relative value – the ice cream and cookie are roughly equivalent. If you’re allowing the household spending to run too high because you don’t set financial boundaries for your children, you’re setting the wrong expectations for them and you’re not demonstrating integrity. You’re living beyond what you can support.
Adult children – If adult children need financial help, make sure it’s unusual and not the norm. If they have repeated needs for help, they’re not managing their financial lives well. Continuing to bail them out only allows them to slide along until they create the next financial mess. It’s a never ending cycle for you and for them – unless you stop it. Set boundaries on what you’ll do and keep them. Writing a check for everything they want fixed isn’t the answer.
Odd events – If something always comes up that’s worth making an exception to your spending plan, then it’s not really a random event. You’re just always finding a reason to spend more. The event can be a bad thing – having too much work to be able to get home and fix dinner, so you eat out. Or it can be a good thing – your friend got a promotion so you go out and celebrate. But if there are regular excuses for spending too much, you need to recognize that, set parameters, and stick with them.