Avoiding the Money Dark Side: Toxic Financial Habits

Last night I had a great conversation with Andrea. We talked about how things are going and what we are thinking about.

We just got back from a trip where we met up with some extended family.  Part of it was good to see some family, but it also became clear how toxic environments can instill habits and thoughts that are very difficult to break in a family tree. It isn’t all about money, but it seems money issues can stem from other family problems.

It isn’t like Andrea and I don’t have our own unique struggles. Part of what I think makes us unique, and our situation different is that we are actively talking about what is going on.

This post is my attempt to process these feelings and try to make sense of the world around us.

Analyzing Yourself and the People Around You

I started seeing a personal counselor a few months ago. It’s been scary because it has helped me process what I’ve been thinking and what I’m scared of.

When you start to process your behavior and thoughts and look at how people behave around you, it can be eye-opening.

We like to think that how we think, and the habits we formed are all made in a vacuum. But the reality is that most of these things were developed from what we experienced when we were younger. In other words, our actions are mostly a response from the environment where we grew up.

My spending habits as a young adult was a defensive mechanism. I didn’t build up massive credit card debt because I wanted debt. It was my way of coping with the internal pain and confusion I wasn’t sure how to handle. It was a temporary fix to a much larger problem that wasn’t going to get solved by buying things I couldn’t afford.

We are All Damaged

I’m not better than anyone. Outside of the color of my skin, I didn’t grow up with any unique advantages. I had a tough childhood that was full of conflict, hatred, and pain. I didn’t have a close relationship with anyone in my family, and I didn’t realize how much I feared being abandoned and alone until recently.

I created a habit of internalizing external conflicts. It helped me survive in the environment I grew up in. When I became an adult, and on my own, I coped with some of this pain by getting excited about what I didn’t own. That then led to internalizing the pain I experienced, realizing how much credit card debt I had accumulated. This cycle continued for close to 13 years until I had enough of the results of these choices.

Being in my mid-30’s, I now see where these toxic financial habits were leading me. And it scared the crap out of me.

Taking a look at the behavior of the people around you is not a way to measure and judge how they are doing. It is a learning experience. Understanding the reasons behind human behavior is fascinating, and I think there is a lot we can learn if we start paying attention.

My Daughter Found $40

During the family trip this last weekend, we went to a movie. My daughter went to the restroom and ended up finding $40 on the ground.

$40 is a ton of money to an 8-year old. It is four times the amount of money she gets per month for her allowance.

I don’t want to make my daughters feel guilty about spending money. But I also want to share with them what I’ve learned so they can hopefully avoid most of my mistakes in how I used money.

When this happened, it became clear this was an opportunity to help teach her. She was getting excited about different things she wanted to buy but didn’t have, with her influx of cash. She was browsing Amazon and looking at all of the stuff she determined she wanted but didn’t know that desire existed until now.

This morning I sat both of my daughters down, and we talked about how earlier this year she was ultra passionate about collecting squishies. This passion faded and she moved on to the next thing she wanted.

I said buying stuff is good, but if we get into the habit of always spending every dollar we earn, we limit our options in the future.

Our desires for stuff will change, and some of these items will add value to our lives. But there are some things that we think we want that are not worth buying.

I could see the wheels turning in their little heads about the words I said. At that moment, I realized they were starting to understand a concept that was out of my grasp until recently. And this made my heart happy!

Finding the Reasons Behind Our Behavior

We all have some level of toxic behaviors and thoughts that end up bringing us down in some way.

The important thing is not to ignore what is going on and start asking good questions:

  • Are my habits healthy and sustainable?
  • Will these financial habits lead me to where I want to go?
  • If my kids and family mimic my behavior, will that be a good thing?
  • Will my future self want to smack me for what I am doing now?

I’m learning that one of my biggest strengths is being able to take an honest look at my life and reflect on what is happening.

Our behavior and habits aren’t going to change without work magically, and thinking about the “why” isn’t also going to do anything directly. Asking good questions isn’t going to make anything different.

But the reasons behind our actions give us a starting place to see what is going on. We get a vision of what our future might look if we continue on the path we are on. These thoughts can give us the motivation we need to stop hurting ourselves and begin the healing process.

Toxic Financial Habits

Below are some of the toxic financial habits I found in my past behavior, and some of what I see around me:

  • Finding your happiness and value with what you own.
  • Not thinking about your financial future.
  • Spending more than you make.
  • Spending every dollar you earn.
  • Always thinking about what you want that you don’t have.

Each of these things leads us down a path of being financially broke, regardless of the amount of income we bring in. You could be bringing in multiple millions per year and not have much to show for it and be miserable.

The financial consequences of these choices are just revealing part of the problem. It isn’t just that these things create financial problems when continued, but they reveal more significant issues about how we are coping with our reality.

If doing all of these things made a person happy, you could justify that they might be worth it. But that isn’t the case. They all take us down a pathway of death. And they are giving us insight into much larger problems.

Avoiding Financial Reactions

When we aren’t looking at the bigger picture of our whole life, it is easy to get caught up in dealing with the problems that are smacking us directly in the face.

In my case, this meant dealing with the massive amount of credit card debt I had accumulated. I would get motived to pay it off, and then end up repeating the cycle.

It didn’t occur to me that the problem was much bigger than the debt. This reason is why I think it is a good idea to learn to save money while paying off debt. It isn’t a “one-stop solution” to the bigger problem, but it helps in figuring out how to fix the core problem instead of just putting a bandaid on the deep wound.

The issue becomes about requiring us to react to the financial problems caused by our choices. Instead of tackling the core issues, we need to fix the immediate problem.

If we compare having to react to financial issues, to being intentional with what we do with our money, you can see that it becomes a matter of who is controlling the situation. Are we using our money to push us towards where we want to go, or are we letting money and what we buy dictate how we have to spend future income? There is a big difference between these two options. Both will lead us down different paths, and only one of them is based on where we want to go.

Being Okay with Financial Misery

Looking around, I see people creating coping mechanisms that allow them to excuse the choices they make. Even when those choices lead to pain and suffering. This is how someone who knows that what they are doing is not financially smart, but they can’t figure out how to break the cycle.

It is like people assume the situations they are in is just how life has to be.

But at least in my case, the financial pits of death I found myself in were caused mostly by my choices. If I continued with those choices, I would have to go through the same pain over and over again. And that’s exactly what I did until I decided to turn things around.

Maybe people feel like they deserve their life to be this way. That they don’t really have an option to change things — that they will always be bound to their bad habits.

Change is always possible, but things aren’t going to be different without us diving deep into the problem and figuring out what is “really” going on. Not just with figuring out the solution to the current issue, but what led us to these behaviors in the first place.

I say all this from a place where I experienced all of this myself. To this day, I’m still working on the internal issues that caused me to build up massive amounts of credit card debt. I’m motivated to pursue financial redemption while tackling the core problems.

Change Your Family Tree

All of this has made us (Andrea and I) realize that we have an opportunity to do what few people are doing: changing their family tree.

Most people aren’t stopping to take an honest look at their behavior. They live life however they do, going through the same cycles. And most people aren’t going to change their habits for the better.

I don’t want to be successful because of luck. I don’t want to have a thriving marriage because we avoid hard conversations.  My goal is not to have my kids do well because they learn how to tackle life the exact opposite of how their dad lived.

Being intentional is not about being perfect all the time and never making mistakes. It is about being cognitive of what is going on and taking control of your life.

Life is about learning to take control of the things we can change and rolling with the things we can’t.

I don’t know what the future is going to bring. But I do know that I don’t want to be making the same mistakes I made in the past. And I want my family to thrive. Not just in regards to money — but to everything they do (relationships, career, marriage, etc.). I want to be a good example; not just for them, but for both Andrea and I.

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Kim @ The Frugal Engineers
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That A-Ha moment – it’s life changing. Deciding to turn your life around and make a better legacy for your kids is huge. Breaking the patterns of poor financial choices is hard, but the first step is recognizing that you’re in the pattern.

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[…] We need to continue to be responsible in how we use our money and break our financially toxic behaviors. […]