Someone told me they have two primary emotions whenever they think about their financial situation: “It seems like I’m either frustrated or mad. Is that weird? Should money always make me so upset?”
This admission reminds me of a book written more than 50 years ago by Elizabeth Kubler-Ross in which she discussed five distinct stages people go through when facing death.
I think a similar phenomenon is at work when people come face-to-face with a grim financial situation.
Here are the stages Kubler-Ross identified, adapted to personal finance:
- Denial. Unless you are born into extremely dire circumstances, you begin life with no worries about money. You have what you have, and that is “normal.”
But as you get older you discover the truth that either money doesn’t grow on trees or you have forgotten where the forest is. Either way, there’s never enough of the green stuff to go around.
For a while you can deny that you have a problem. Credit cards make this “denial phase” easier—and longer—for many people.
- Bargaining. One day you realize that denial doesn’t keep those credit card statements from showing up each month, so you “bargain.” Bargaining involves making small, symbolic changes in your lifestyle and spending patterns, in place of real, substantive changes.
Bargaining involves more posturing than doing. You pledge to buy generic brands, take your lunch to work, iron your own shirts. That’s a good start, but you really should be discussing selling that luxury car and downsizing to something less sexy and within your budget range.
- Anger. At some point, you figure out that bargaining doesn’t work. That’s when anger takes over. You feel put upon and victimized.
“Life just isn’t fair,” you fume. “If it wasn’t for my… (crummy job, lousy spouse, family background—etc.), I wouldn’t be in this place!”
After a while, this bitter ranting gives way to…
- Depression. Reality finally sets in. All the wishing, negotiating, and blaming in the world isn’t going to make your financial troubles go away. You’re in a tough spot.
What’s left? One more phase—and it’s actually a hopeful one. Sadly, however, many people never get there. They hunker down and try make peace with denial, bargaining, anger, or depression.
What’s that final phase? Kubler-Ross called it…
- Acceptance. When you accept the reality of your present financial circumstances…when you accept that your problems are not going to magically go away…when you accept that it’s up to you to DO SOMETHING DIFFERENT…then—and only then—can you get on a path that leads to hope—and true financial health.
Hope balances a sober appraisal of the present with a confident vision of a better future.
But you have to make the choice to get some help. It’s on you to take that crucial and wise first step. When you do, you can create a plan and get moving in the right direction.
That’s when you’ll start feeling better about your circumstances. And if you keep going in that better direction, you’ll gain more confidence and more momentum. You’ll find that making smart financial moves is habit-forming.
Maybe you see yourself in one of those first four financial “stages.” If so, I’d love to help. Email me at email@example.com and I’ll send you, no strings attached, a free copy of my e-book “How to Put Financial Worries in Your Rear View Mirror: The Financial Freedom Road Map.”
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