You cannot escape the responsibility of tomorrow by evading it today.
Abraham Lincoln
Someone once wrote, in relation to taking personal financial responsibility, âA man is not a financial planâ. I canât remember where I first read this, and Iâve certainly heard it a number of times since, but it rang so true to me I just had to open the book with it. As an independent teenager who worked from the age of 14, I always had money to save for things I wanted and to spend on having fun with friends. Maybe because of this, and because of my parentsâ separation when I was still young, I never really considered the idea that a man, or even my parents, would be my path to financial security.
So it surprised me to find that many people do consider their personal financial wellbeing to be the responsibility of someone else, whether their own parents, a partner, an employer, the government, or even friends or extended family. Many convince themselves that the financial situation they are in is out of their control and wait for outside factors, things they cannot influence, to change in order for their own position to improve. We all lose our way from time to time, and I have been guilty of falling into this mindset in the past too. The important thing is to recognise the signs and to start to change the way you think.
An ancient lesson
Lao Tzu, the ancient Chinese philosopher and founder of Taoism, sums up the power of our thoughts beautifully:
Watch your thoughts; they become words. Watch your words; they become actions. Watch your actions; they become habit. Watch your habits; they become character. Watch your character; it becomes your destiny.
If we indulge in a belief that our financial situation is not our responsibility, ultimately we will create a reality in which our finances are indeed out of control. It all starts with our thoughts, because over time they will play out in our actions. If we can create positive thoughts, in any area of our life . . . well, you can imagine what will start to happen.
Common mindset traps
In my professional role as a financial adviser, I am often taken by surprise when seemingly confident and successful professional women â highly educated executives who lead teams, run corporations and make tough decisions â come to see me with two budgets prepared. The first is their actual budget; the second includes the income of a fictional âPrince Charmingâ who is waiting âjust around the cornerâ to sweep them off their feet and provide for them. They actually spend precious time factoring this into their financial plan.
Iâve also come across men who run apparently successful businesses but are up to their eyeballs in debt â for which they blame the tax office, their suppliers, their clients, their professional advisers and whoever else they can think of, rather than the simple fact that theyâve mismanaged their money and have been living beyond their means. I commonly hear business owners blaming their accountants for not making them aware of their tax liabilities, when the reality is they simply spent everything in the bank account and didnât set anything aside for the tax that always must be paid. Itâs pretty simple: if you earn money (which is a good thing), youâll have to pay some tax (not so great, but unavoidable).
Iâve seen young couples with small children argue that they donât really need any insurance or savings, because their parents will help them out if they ever get into difficulties. Iâve even seen people completely unphased by mounting credit card debt . . . because they have a ticket in next weekâs lottery!
Thereâs nothing wrong with dreaming a little. Iâve no problem with this â in fact I do it too, we all do. If we seriously want to create financial security for ourselves, though, it has to start with us. Right now. No-one else can do it for us. Waiting on, relying on or blaming other people will get us nowhere in a hurry. The first hard truth we need to swallow is that whatever financial situation we are in is completely, 100 per cent, of our own making. Whether itâs good, bad or ugly, we created it. No more excuses.
But this is not just about the negative situations. Itâs important too to pat ourselves on the back if and when we do well financially. This is generally a result of hard work and discipline and is nothing to be shy about. Despite how it might appear on the outside, those who are successful have in most cases worked very hard for that success.
Have a go at this quiz to get an idea of how financially responsible you really are.
Accepting responsibility
Are you waiting on someone or something else to change your life? The first step towards achieving success in any area of your life is to accept that you are wholly and solely responsible for your future. Sure, life will always throw you a curve-ball, be it positive or negative, but your response, the next step you take, is still solely your choice.
I want to share with you a particular lesson I learned that changed my life in a huge way. Like all of lifeâs teachings, it wasnât an easy lesson to learn, but it was well worth the tough time as I believe it helped shape me into who I am today.
My wake-up call
At the age of 19, I returned to Brisbane from a six-month stint in the UK, where Iâd worked as a bartender for a few months, saved a little, travelled Europe and came back with a modest credit card debt that felt huge at the time (more on this later). After working three jobs for several months I managed to repay the entire credit card debt and even save enough money to move back to Melbourne, where I planned to begin studying IT.
In the meantime Iâd started seeing someone, who told me he was also moving to Melbourne at the end of the year. âWhat a coincidence!â I thought at the time. I wasnât looking for anything serious, but before I knew it we were moving in together, using my credit card to pay for many of the âjointâ costs associated with moving, using my savings for the bond, which was in his name . . . well, you start to get the picture. From very early on he had started racking up a debt to me. I soon became uncomfortable with the relationship, but I kept thinking I needed to hang in there in order to recover the money.
I had convinced myself to wait it out until the lease on the apartment was up, otherwise Iâd likely lose the bond money as well. The relationship continued to deteriorate while, not surprisingly, the debt escalated. I felt my life was not my own, but I still thought I couldnât leave him because I needed to get my money back. I was staring down the barrel of three years of study and could barely afford my own living costs, let alone the huge credi...