my two cents

Why Can’t I Get It Together Financially?

Frances, 27, can’t figure out why she’s so bad with finances. She’s successful in her career — she manages several big accounts at a marketing firm — and is usually the “responsible one” in her group of friends. But when it comes to keeping track of her bank balance, let alone saving anything (which she hasn’t), she feels totally incompetent. As a result, she avoids anything finance-related, which she knows is costing her additional stress (and more money) down the road … but it’s all just so boring, and she’s so terrible at it. Some months she gets thisclose to nothing before her next paycheck hits, which is scary and embarrassing, but every time she tries to plan or budget, she can’t stick to it. Why can’t she get it together? How can she fix this?

I used to look away on purpose when an ATM showed my bank balance on the screen after I withdrew cash. It could ruin a whole night, knowing where I stood after taking out $40 for drinks or whatever fun thing I’d planned to do. I’d hover and wait for the whir and shuffle of bills, steeling myself for the dread of the blinking “insufficient funds” message. It was excruciating. Most of the time, I’d squeak by — and promise myself I’d be better at managing my money going forward. But a few weeks would go by, and the pattern would invariably repeat itself.

I could have avoided this ritual of self-flagellation if I checked my bank balance more often, but I rarely did. Convinced I was born lacking the “good with money” gene, I seemed to have a mutation that caused me to sweat profusely in the presence of dollar signs, as though my brain was overheating. In my early 20s, I swung between short bursts of nose-to-the-grindstone tactics (cash only, strict allowance!) and throwing in the towel —finances weren’t my strength, clearly; why waste time on a lost cause? But as life got bigger and more expensive, it was obvious that I needed a better approach. (One low point: I had to ask a very kind woman at a nail salon if I could pay her the next day, after my paycheck came through, which was shameful on many levels.) Still, every time I gritted my teeth and resolved to spend less, save more, and adhere to the budgeting tool du jour, I’d fall off the wagon after a few days.

The problem wasn’t that I didn’t have enough money — in general, I had good jobs and a reasonable lifestyle. In hindsight, I now know that my avoidance stemmed from feeling so incapable of hitting certain mystical standards (“I’m not going to buy any more clothes in the next five years”) that I was constantly ashamed of my spending habits. No wonder I was hiding from my bills — I saw them as hard evidence of my own weaknesses.

According to Manisha Thakor, the director of wealth strategies for women at the BAM Alliance and CEO of MoneyZen Wealth Management, this pattern of avoidance is common, and stems from desires for perfectionism. “In my experience, women often think that before they make decisions about money, they need to be handling it perfectly,” says Thakor. “By comparison, studies show that men are often more comfortable with ambiguity, and willing to take action with incomplete information, sometimes to a fault. And that’s the thing with money — there often isn’t a right or wrong answer. If you’re hesitant to take action in the absence of deep expertise, that translates into being less proactive with finances.”

It’s a similar principle to the “confidence gap,” illustrated by a commonly quoted survey from Hewlett-Packard that found that women applied for a promotion only when they believed they met 100 percent of the job’s qualifications, whereas men applied when they thought they met 60 percent. “Women often seem to push themselves to a level of perfection that’s inconsistent with higher-level roles where you can’t possibly be an expert in everything — and I think a similar thing happens with women and money,” says Thakor. “If you give yourself a wider berth, and understand that you don’t have to be an expert to make good decisions, it’ll help you get unstuck.”

What’s more, a little bit of information goes a long way. “First, understand that there are only a handful of concepts that will take you 80 to 90 percent of the way through the financial knowledge you need,” Thakor says. She suggests picking up one of the many short, multi-concept personal finance books available (she’s written one herself; here’s a longer list to check out) and finding someone else to read it with you — like a nerdy book club of sorts. The entire point of this literature is to help you make a plan, which —as any anxious person knows — is the cornerstone of warding off panic. “I encourage you to start with something very basic,” says Thakor. “Focus on small chunks that are achievable.” (Every person’s initial “chunks” will be different, but mine was automating a transfer to my savings account for $200 per month. I realized I didn’t miss it, and I’ve been raising the amount incrementally ever since.)

Second, look for someone a little older whom you can talk to — a money spirit guide, if you will. “I recommend finding someone who’s seen a few more moons than you, and asking for her advice,” Thakor continues. “When you get that deer-in-the-headlights feeling, it can be hard to dig yourself out of it, but if you involve more people, it becomes a team project.”

As for why you keep falling off the wagon, psychologist Brad Klontz, the founder of the Financial Therapy Institute, believes that strict budgets fail the same way that most diets do. “When you create a sense of deprivation in your brain, it behaves in a way that it might if you’re about to enter into a famine — of course it’s going to rebel,” he says. “I’ve seen a lot of people make financial plans and then break them because they get flooded with feelings of, ‘Hey, I work hard, I deserve this!’ And then they’re triggered to overspend.” It’s much better to approach the process as an experiment, not a set of rules, he explains. “Otherwise you’re going to set yourself up for feeling like a failure, and get even more discouraged.”

On a similar note, stop judging yourself based on the numbers you see; it only exacerbates the yo-yo cycle. “For some people, looking at bills is like stepping on a scale,” says Thakor. “There’s so much shame packed into it —you’re weak, you’re a bad person. We imbue those numbers with more meaning than they actually deserve.” Instead, think of it as doing inventory — you’re just taking stock. “Your finances don’t make a statement about you as a human being,” Thakor adds. “They just reflect what you spent and what you owe — nothing more.”

And what if those numbers are really bad? “It happens to everyone. Sometimes you’re like, ‘Holy crap, I gained ten pounds!’ And it’s like a slap in the face,” she says. “But you know what you need to do — eat less, exercise more. Spend less, earn more. It’s not fun, but you have two levers that you’re always pulling in different ways.” If it seems like overly simple advice, that’s because money is, at a basic level, not terribly complicated —it’s changing your habits that’s tricky. “Remember, you don’t need to solve everything during the first go-round, but if you take small steps, you’ll see immediate results,” says Thakor. “That will be empowering, which is the crucial component. Once you gain a sense of ownership, you’ll see exponential improvement.”

Of course, confidence is an elusive beast. For me, the real catalyst for getting a handle on my money was making enough of it so that I didn’t feel so strapped and guilty all the time. Obviously, “make more money” isn’t realistic advice, but hear me out: Once I stopped berating myself about my financial decisions, I gradually stopped avoiding them — and then I made better ones. I wasn’t so helpless and dumb after all. I still get stressed about money from time to time like everyone else, but ATMs don’t mess with me anymore — I know I can control what’s on the screen.

Why Can’t I Get It Together Financially?