In a recent article posted on Fox Business which is based on the original article from FiveCentNickel.com, psychiatrists say that realizing that there is a problem is the first step toward solving your financial dilemma. But what is more important is the next step after the recognition of the financial problem.
When it is obvious you are having financial troubles – overdue bills coming in, unpaid debts, etc. – solving the problem can throw people off balance if they fail to engage in behaviors that will actively address the problem. Here, seven examples of counterproductive behaviors are identified:
Procrastination is a destructive behaviour. Most problems in life tend to get worse if you put off dealing with them. But if the problem is money, there is an explicit cost in delaying which is called interest. Doing nothing about your money problem is a faster route toward a financial disaster.
False progress is another counterproductive behavior. There are times when you feel that by saving on some small ticket expenses and then splurge on an expensive item without paying off old debts is an achievement. The lesson here is to beware of false progress – actions that seem to be addressing the problem, but which don’t make a material difference and are not part of a larger plan to get your finances on track.
Another behavior that could yield a bad effect is the so-called “my turn” approach. Similar to the false progress, this behavior is a trap. How does this happen? In a situation where money is tight, you suddenly thought that you deserve to buy something and your partner also thought of getting another item for himself. That will definitely get you both into deeper debt.
Another problem couples run into is when one doesn’t fully own up or reveal the extent of the problem. By hiding the problem from our partner – like when your credit card purchases have gone beyond your limit and you could not keep up with the payments – you won’t be able to get the cooperation and help to end your financial problems. Both you and your partner need to know the extent of the problems and work together to solve it.
Getting mad at people or credit card companies where you owe money is misplaced anger – another destructive behavior. Even if you refuse to pay them on time, your account incurs late fees and your interest rate rises.
Some people are very good at shifting balances among credit cards. This skillful juggling is a behaviour that can get you in trouble eventually as too many new accounts can hurt your credit rating resulting in higher interest rates.
