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Are you struggling to make any positive financial progress?
Reading finance blogs with good intentions, but never actually making the behaviour change? Self-sabotaging behaviour is a common problem with money and in other areas of life.
Identifying your self-sabotaging behaviours, and understanding them can help you overcome financial self-sabotage. Get over that plateau and reboot progress towards your money goals.
What does Self Sabotage Mean?
Self-sabotage is when a person acts in a way that damages their own well being. It is a common problem people encounter when working towards financial, fitness or academic goals. Some aren’t even aware that they are self-sabotaging.
Have you ever found yourself:
- Turning on an addictive Netflix series when you have an important assignment due the next day?
- Indulged in a six-pack of beer despite vowing to start losing weight just hours earlier?
- Deciding you need to get your finances under control, then binge shopped for non-essential items online?
Most of us have self-sabotaged by behaving in a way that takes us further from our own important goals.
Why do People Self Sabotage?
There is a multitude of reasons for these destructive behaviours. Sometimes it is simply that the self-sabotaging behaviour produces short term pleasure, which trumps the threat of associated but delayed harm. Delayed gratification is hard.
- The doughnut will taste really good for the next 5 minutes. You won’t notice an improvement by not eating the doughnut (and it will take quite a while to reap the benefits of resisting the doughnut daily).
- You know you need to save more money for a house deposit. But all your friends are going out for dinner. It will be really fun, and you don’t want to miss out. You will eventually enjoy owning your own home more. But the goal seems too far away to compete.
There are also deeper, more subconscious reasons for self-sabotage.
Everyone has heard of imposter syndrome now. Many of us have suffered from crippling self-doubt that undermines confidence.
Being successful in knowledge-based work is commonly associated with imposter syndrome. Have you ever thought that your success in life was just due to good luck? Felt like a fraud and tried to keep this hidden?
This is imposter syndrome, and it tends to affect high achievers, and women more than men.
Imposter syndrome can occur with money too. Perhaps you grew up in a family of modest means. Financial success doesn’t feel real. It is easy to feel that we somehow got lucky with money and don’t deserve to have more.
Incredibly intelligent professionals often bury their heads in the sand, because they don’t feel they have the knowledge or ability to make financial decisions such as investing. If you can reach the peak of your chosen career, you can certainly set financial goals, and make a simple plan to reach them!
Self Sabotage due to Fear
Fear is a big factor in self-sabotage of all sorts. Fear of failure can lead to money self-sabotage. A certain amount of this is helpful, as it will hopefully help you avoid giving your money to a conman (and there are plenty around). But those consumed with fear of failure will never invest.
Stockpiling cash in a bank account earning 1% is insufficient to provide for retirement. Over time, the value of savings is eroded by inflation. Minimizing risk needs to be balanced with taking some investment risk in order to achieve your financial goals.
Fear of investing being too hard, or that you will fail because you are “no good with money” is also a common issue. Some people fear not being able to reach all their goals as they may be unrealistic. Choosing to stick their heads in the sands, they risk not reaching even their most important goals by not taking charge of their finances.
Fear of financial success can also lead to self-sabotaging behaviours. If your background is humble, the thought of “becoming rich” can be uncomfortable.
Wealth is often associated with evil in society, although of course money is neither bad nor good (but can be used for either). Savers can fear other people judging them for saving money or showing an interest in personal finance. They can also fear social rejection due to a change in financial circumstances.
Fear of change can also put people off taking the first step. We love to form a little rut. It’s comfortable, safe and familiar. Any change in habits needed to save more money and follow a financial plan tends to, at least initially, be uncomfortable. Suddenly needing to budget spending instead of continuing to spend each paycheck with abandon, can lead to fear of deprivation.
As Australians, we already live incredibly fortunate lives. As a higher earning Australian, we have won the life lotto from a global perspective. Inequality is increasing throughout the world. Over 700 million people live in extreme poverty worldwide.
You may feel guilty about the lucky hand you were given, even though you took that good luck and worked hard to make the most of it. You and I know we were born with advantages that gave us a huge head start.
This can lead to great things, including paying it forward in charitable donations and creating a fairer, kinder world. But where this guilt can be really unhelpful is when it is subconscious and leads to self-sabotaging behaviours. If you feel guilty for accumulating wealth, but don’t spend the time examining your feelings, you may waste savings with silly choices. Spending savings on choices that don’t provide you value, and don’t make the world a better place is a terrible waste.
Guilt also commonly works in the opposite direction. It is easy to get obsessed with saving money, to the point where your good habits become destructive. After you are on track to meet your financial goals, don’t let spending guilt stop you from living your dream life. Whilst still in the accumulation phase, a “fun money” account is really helpful here, in providing permission to live a little on your journey to financial freedom.
Self Soothing Behaviours
Life can be stressful. Shit happens, regularly to some people. It is natural to want to “treat yourself,” particularly after a bad run of events.
Take care to note the difference between self-care and self-soothing. Self-care is important. It is looking after your body, mind, finances and relationships to gift yourself the best life possible, under your circumstances. Self-soothing activities distract you from whatever is troubling you and provide short-lived relaxation.
You may drink a bottle of wine to feel better after a terrible day at work. You know that amount of alcohol in one night is bad for you. This is self-soothing and not self-care. Obviously used repeatedly as a mental crutch to deal with life are a slippery slope into alcoholism and complete life destruction. But long before that, smaller negative consequences occur such as a hangover, weight gain and lost productivity.
There is absolutely nothing wrong with treating yourself to a massage after a stressful week. If it is in your fun money budget, you should go ahead and enjoy. But it is not likely to have a long-term effect on your health, wealth or mental wellbeing.
Self-care is taking steps to take better care of yourself. These activities often don’t provide immediate rewards, but over the long term provide a far better return than self-soothing activities. Going for a run often doesn’t feel like self-care. To begin with, it can feel like torture! But over time, weight loss and improved fitness often translate to higher energy levels and feeling better. Eventually, you even start to get a natural kick from those endorphins when you actually exercise.
The answer to financial stress is clearly not spending money on something that makes you feel better in the short term. That new car smell may boost your happiness for a few weeks during your commute. But if you can’t really afford it, the car loan will leave a longer-lasting financial and wellbeing hangover.
How to Tell if you are Performing Self Sabotage?
Slow down. So many people spend little to no time thinking about the big things. I think this is a big cause of self-sabotage. If you don’t spend any time working out what your real priorities are, you will never start working towards them.
It is not unusual to hear people stating spending time with their children is their number 1 priority. They often strive away from their goal by working excessive hours to pay for never-ending consumer purchases and status symbol cars and homes.
If your children are your top priority, what do they really want and need? Spend some time working it out.
Many others state that money is not a priority, as an explanation for disinterest in financial literacy and investing. It’s great that these individuals don’t worship money. But often those that claim that money is not important are experiencing cognitive dissonance. By not looking after their money, they are indefinitely dependent on a wage, trading time for money, whether they like the work or not.
If money is not important to you, what is? Spend more time reflecting on your goals, and how your actions will move you towards, or away from your goals.
Be honest with yourself and try to identify soothing self-soothing behaviours that are sabotaging your finances.
Watch out for Social Sabotage
Even those that love us can sabotage our financial plans. Your friends and family love things the way they are and suffer the same fear of change.
They may also feel challenged, or defensive if you choose to make smarter financial decisions.
Those close to us may try and convince us that bad debt is normal, and you only live once. If struggling to make the minimum repayment on your credit card and working to indefinitely meet minimum repayments is living!
Let these loved ones know you have your own goals, and you are working towards goals that are meaningful to you. You may inspire them to make a positive change too.
How to Stope Self Sabotaging Money Behaviour
Identify how you are self sabotaging.
Spend some time thinking about what your goals should be your priority. Work out exactly how you are going to there. Consider the sacrifices that will need to be made, and make a conscious decision whether they will be worthwhile in the long run.
Form a plan. Schedule a regular appointment with yourself (+/- partner) to review your progress, monthly, quarterly or bi-annually. Put it in your calender with reminders. Make it a priority.
Find a way to remind yourself of your “Why”. Something that inspires you related to your largest goal. It may be a picture of your kids in your wallet, or some words stuck on your credit card (fully paid off home?).
Then it’s time to take your brain out of the picture.
Remove as many temptations as possible. Cut up the credit card you don’t need. Automate everything you can. Pay off credit cards, in full, by auto-sweep every month. You can generally set this up with the credit card company.
Direct debit your planned investments every month (fortnight, or quarter) so you will be less tempted to redirect this money to a self soothing activity.
Examine negative thoughts that come up. Write them down or talk about them with a friend. Is it classic imposter syndrome or fear of failure?
Confront any guilt you feel about becoming financially successful. If this is an issue for you, plan some ways you could make the world a better place.
Spend some time choosing a charity that you really believe in. Here’s mine. The good news is, that a small regular donation is all you need at this present moment. As your finances improve, you can increase donations as you wish.
Make sure you have some “fun money” put aside to spend regularly, and guilt-free. As long as this is budgeted for, you can spend it on whatever you desire. You will naturally start to prioritise the spending that brings you more joy when as you run short of “fun money”. Get the most fun for your buck!
Set some mini-milestones along the way to your undoubtedly huge goals. It’s a long journey. Like most things, it’s a lot easier to break it up. Take the time to celebrate and treat yourself in some way when you meet these milestones.
For inspiration, here are mine (asterixed are still a work in progress):
- Out of credit card debt!
- Positive net worth
- $1000 emergency fund saved
- Student loans paid off
- Home deposit saved
- 1st investment outside super
- Hitting double mortgage repayments
- Paid for a car in cash
- 1st investment property
- 1 year of living expenses in offset
- $1 million net worth
- Coast FI (for retirement age 60)
- Home loan fully offset*
- Lean FI*
- $1 million invested*
- Kids education fees saved/invested*
- Coast FI (for retirement age 55)*
- Self insured for life and income protection (and free of those awful premiums!)*
- $2 million invested*
- Financial independence*
Are you self sabotaging? What’s your worst habit and how are you going to break it! Comment below and share your ideas to help others.
Aussie Doc Freedom is not a financial adviser and does not offer any advice. Information on this website is purely a description of my experiences and learning. Please check with your independent financial adviser or accountant before making any changes.