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Kevlar for the Mind: Wrong thoughts can influence finances

In many of my past columns, I’ve talked about how our thoughts influence our moods, attitudes and behaviors.

From how we perceive our relationships to our work situation and overall satisfaction with life, what we say to ourselves greatly determines our present and future. This applies to our financial situation as well.

There is a “psychology” to saving and spending. How we pay our bills, save for a rainy day, or whether we ship a few dollars off to our Thrift Savings Plan, that inner voice we all have guides us down our financial paths. Where we end up is determined by what that voice is telling us.

The good news is that we are in control of our thoughts. At any time, we can decide to view things differently. If we’ve gotten off track, we can shoot a new azimuth to a point of financial stability and security.

However, it’s important to be aware of the different thoughts that can cause us to veer in the wrong direction:

• I need to have what others have. Trying to keep up with Sgt. Jones is a huge mistake. So what if he has a flashier car than you? Who cares if his Harley costs more than your house? Chances are Sgt. Jones is in debt up to his neck and wakes up each morning wondering if today is the day the repo man comes to call.

By the way, nobody else really cares what you have. They’re too busy worrying about what they don’t have.

• I can pay for it later. One need only look at the housing crisis and the fact that the average American household has more than $8,000 in credit card debt to appreciate this faulty thinking. If you can’t pay cash or pay it off within a month, don’t get it.

• I’m too young to worry about retirement. You are never too young to start saving for retirement. Consider that $1,000 socked away when you’re 20, growing at an average of 10 percent per year, will reach almost $73,000 when you’re 65. That same $1,000 put away when you’re 50 will grow to only about $4,200 at age 65. It’s all about compounding interest.

• I don’t have any extra money to save. This is the biggest lie we tell ourselves. Almost everyone can find money each month to put into a retirement account. Granted, you may have to stop eating out 10 times a week or forego buying those new rims for your car, but you can find money in your budget.

These are only a few of the things we say to ourselves that keep us from financial security. Take a few minutes and ask yourself what your inner voice is telling you about saving and spending. It will pay off in the long run.

My next column will provide specific behavioral techniques to help you regain control over your finances.

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Bret A. Moore is a clinical psychologist who served two tours in Iraq and is the author of “Wheels Down: Adjusting to Life after Deployment.” You can e-mail him. Names and identifying details will be kept confidential. This column is for informational purposes only.