Overcoming Financial Self-Sabotage

Most of us have committed some form of financial self-sabotage at some point or another in our lives, and those who haven’t can easily understand the idea.

We make a series of small, positive financial moves and feel like we’re in a good place. We’re moving forward on the medium sized and big goals we have for ourselves. Perhaps our debts are shrinking noticeably, or maybe we’ve bolstered the amount of money we’ve accumulated in our savings accounts, or maybe it’s simply the fact that we’ve managed to get caught up on our bills and out of constant danger of over drafting.

When that occurs, a few things can often happen.

Sometimes, we might “celebrate” in a way that undoes the positive financial steps we’ve taken. For example, a person who manages to pay off a credit card might celebrate by making a significant but non-essential purchase, which immediately puts a balance right back on that card.

Often, people simply revert back to their old behaviors, which means that they go right back to overspending and eventually dig themselves right back into the financial hole that they worked so hard to get out of.

In any case, financial self-sabotage is a real thing. A run of good behavior is concluded with a few detrimental choices, which results in much (or all) of the benefit of the good behavior vanishing into thin air, leaving the person back where they started and with a sense that all of that effort was for nothing.

For many people, this becomes a cycle, and it’s a cycle that pops up in a lot of self improvement. You feel like you need change, you do a bunch of things to change, you feel good about the changes, you’re tempted into old behavior patterns or splurges, you give in, you go right back to where you started, and often the cycle repeats itself.

The question is, how do you break out of this cycle? How does a person stop this cycle of positive moves and self-sabotage in order to be able to make continuous progress toward the financial life they want to have?

There are a lot of approaches and tools for this. Here are some that have worked for me with both financial and non-financial patterns of self-improvement in my life.

Aim for Small Permanent Changes, Both Adding Positives and Eliminating Negatives

Rather than going for the big, flashy changes or tons of changes all at once, aim instead for a small number of little changes that can be absolutely permanent and then add to them slowly over time.

For example, many people who want financial change in their lives will go on a huge spending freeze for a while, not buying anything other than bare essentials. Sure, that’s an effective short term strategy, but in doing so you’re changing so many habits and routines in your life all at once that there’s bound to be a backlash. This hard rule will eventually start to crumble.

A much better approach is to pick five or so minor changes that you think you can permanently stick to, and stick to them. For example:

Buy only store brands for food staples, household supplies, and toiletries (except for when the store brand is specifically problematic). If you’re buying ketchup, buy the store brand, not Heinz. If you’re buying toilet paper, buy the store brand, not Charmin. If you’re buying dishwashing detergent, buy the store brand, not Cascade. If you’re buying trash bags, buy the store brand, not Glad. Only revert from this if there’s a specific problem with the store brand version of the product.

Make a slow cooker meal once a week and eat the leftovers. Once a week, make a big slow cooker meal, like a big stew or soup or casserole or roast, and enjoy it for dinner that evening instead of going out. Make plenty so you can save the leftovers and have them for lunch or dinner on subsequent days. You can even designate a “slow cooker day” on one day of the week. (For us right now, this is usually Tuesdays and Thursdays.)

Cut one of your streaming services and rotate them. Instead of being subscribed to multiple streaming services at once, cut at least one of them and then focus on binge-watching the content on the one or two you’ve kept. Then, move to others once you feel you’ve watched everything of interest to you.

Adopt some simple rules for enjoying and cultivating your collections, not just accumulating them. If you have a big overstuffed bookshelf, don’t add another item to it until you eliminate an item to make room for it. The same should be true of any collection. Your collection of spices should fit in a reasonably sized spice rack (unless you’re a professional chef or something). Your tools should fit in a reasonably sized tool chest (unless you’re a professional mechanic or carpenter or something like that). You get the idea. Put a clear limit on the size of your collections and cultivate the collection within that boundary. Encourage yourself to actually use the items so you don’t feel as bad when you cycle them out and replace them.

Give up beverages besides water. This is a shift that’s both good for your health and good for your wallet. Drinking soda, alcoholic beverages, teas, and so on add to the cost of simply getting water into your body. It’s a very simple switch that can easily become a very normal routine.

If You Do Make Big Changes, Choose Permanent Ones That Can’t Easily Be Rolled Back

Choosing to go on a big spending freeze is a huge change, but it’s one that you can easily roll back whenever you feel like it, and thus it’s one that’s begging for some self-sabotage.

If you’re wanting to make a big change in your financial life, choose a big change that isn’t nearly so easy to roll back. For example:

Move to a less expensive residence. This might mean a smaller place with lower rent, or a smaller house with a smaller mortgage. This not only reduces your direct bills, but also reduces things like utilities, property tax, insurance, association fees, and so forth.

Sell your car. If you’re in a situation where you can get around via mass transit, bicycles, scooters, on foot, or via other means, selling off your car means that you’re committing fully to those other modes of transportation because, again, the path of least resistance keeps you away from simply buying a car if you don’t absolutely need one.

Apply for other jobs in your field and accept one. Once you’ve polished up your resume and sent out those applications, they can’t be pulled back. It drastically lowers the resistance to getting a new job that pays better. Of course, once you interview and accept, you’re heading down a new path.

Replace all of your light bulbs with LEDs. If you have any incandescent bulbs still in your home, change them all over to LEDs. This will reduce your energy bill going forward and you won’t have to replace bulbs for a very long time.

Air-seal your windows and install some weatherstripping around drafty doors. This will reduce your heating and cooling costs going forward by preventing heat escaping in the peak of winter and preventing heat from coming in during the peak of summer. Again, this isn’t something you’ll easily be able to undo going forward.

Reward Yourself with Non-Financial Incentives

If you feel like you’ve made a ton of progress toward your goal and you’ve been behaving well, it’s okay to reward yourself in some fashion. Just be mindful of what kind of reward you’re giving yourself and make sure that it doesn’t roll back your progress toward the goal. In other words, find rewards that revolve around resources in your life that aren’t related to what you’re trying to change.

For example, if you’re making financial changes, you’re probably going to want to avoid rewards with financial costs. Instead, consider these other types of rewards.

Give yourself some uninterrupted free time. Block out an entire day to simply do something fun that doesn’t cost money. Spend a day reading. Spend a day binge-watching a Netflix series. Spend a day going on a hike. Spend a day playing an epic boardgame. Spend a day going on a 50 mile bike ride. Give a big block of time over to something you enjoy that you don’t normally give adequate time to.

Sleep in. One of my favorite personal rewards is, whenever possible, I let myself sleep in without an alarm, waking up naturally based on when my body tells me to. It feels incredible, but it usually means I have to plan ahead and prioritize it a bit. Give yourself that reward on a Saturday and/or Sunday after a long work week, as a reward for great financial and professional choices all week long.

Bake a giant batch of cookies or make a few loaves of homemade bread. These kinds of indulgent homemade foods can usually be made incredibly cheaply, but it’s something that we don’t often take the time to do. Let yourself have that time. Work the dough with your hands, smell the cookies or bread baking in the oven, and enjoy that delicious taste.

Hit the library and check out something purely fun. Find a goofy comedy or a page-turner from an author you’ve always enjoyed, check them out, and take them home with you. Give yourself a laugh or allow yourself to get lost in a book. It’s free, after all.

Start a “brown bag” club. In a previous career moment, I was part of a “brown bag” club where people would gather and eat their lunches that they brought from home together. It provided a lot of social value and professional networking without the cost of going out for lunch. Put some time into getting this started at your own workplace. Look for people in your workplace who “brown bag” and start a “brown bag” lunch group.

Make other positive lifestyle changes. Perhaps increased financial stability means you can reward yourself by finally taking the risk to switch to a new job, away from the one that’s driving you crazy. Maybe it means you can finally step away from a relationship that’s dragging you down.

Automate the Money You Saved from the Cut in Spending So You Don’t Just Spend It Elsewhere

If your financial changes represent clear-cut improvements in the amount of money you’re spending each month, don’t just let that money sit around to be gobbled up by new expenditures. Instead, put that money to work as quickly as possible by automating some good financial moves.

If you’ve cut 1% of your overall spending, for example, head to your HR office at work and bump up your 401(k) by 1%. Alternately, start an automatic transfer from your checking to your savings account equal to 1% of your spending so that money is set aside for emergencies.

This kind of automation takes the decision as to what to do with that money out of your hands and out of the heat of the moment. It transforms your good habits and good financial decisions directly into the building of a stronger financial foundation for yourself and your family while also taking away the temptation to spend idle money.

Eliminate Bad Influences

Many people self-sabotage due to the negative influences of people and things around them. They make really great choices on their own, for example, but when a particular friend is nearby or when they go to a particular place, their choices become disastrous. Those types of things are negative influences, and whatever the source of that influence is, it’s contributing a strong negative into your life that you should strongly consider eliminating.

Here’s how to delve into the issue of bad influences.

Carefully examine situations where you tend to make bad financial choices. Where do you make those choices? Who is with you? What devices are you using? What apps? What have you been reading recently? What you’re looking for are the things that “nudge” you into those poor choices. You’re especially looking for things that pop up again and again.

Cut those things out of your life – or at least reduce their influence. If you have a friend that is only around when you’re spending money, accentuate other friendships. You don’t have to end this friendship, but make it a point to spend plenty of time with other friends. If a particular website is tempting you to buy, block that website. If a particular Instagram profile is tempting you, unfollow that profile. If you spend money whenever you go to the bookstore, stop going to the bookstore (maybe hit the library instead).

You don’t have to quit those influences cold turkey – though that’s often a good approach. Rather, just dial down the influence from that source and find other things that influence you in a much more positive direction.

If It Feels Overly Constraining, Get Rid of the Tightest Constraints

One of the biggest reasons people give into self-sabotage is that they begin to really resent the restraints they’ve put on themselves. They feel like they’ve lost some degree of freedom in their lives, or they feel like they’ve lost some element of their life that they really enjoy.

If you find that this is true for you, rather than letting that resentment build until it becomes self-sabotaging, address it immediately. If you make ten habit changes and find two of them are making you uncomfortable, undo those two. The other eight are still there and are still moving you in the right direction without feeling awful.

The biggest unnecessary expense in my life is my hobby spending. I’m very aware of that and I try lots of methods to keep it at a reasonable level, but I also know that if I constrain it too much, I will end up resenting the constraints after a while and end up making worse choices over the long run. Instead, I give myself some breathing room in that area. I give myself a fairly healthy monthly budget for hobbies and, as long as I stay within that budget, I’m in pretty good shape. I find that when I try to shrink that budget significantly, particularly when I’m trying to make a permanent change, I tend to feel frustrated, and that tends to lead to financial mistakes.

The same thing is true when dieting. If you find yourself resenting the rules of your diet, that diet is about to end. Instead of dieting, then, just figure out a few permanent changes you can live with and don’t start eating more in other areas. Give up soda, for example, or switch to skim milk instead of coffee creamer.

Listen to yourself. Know when you’re feeling frustrated and overly constrained, and loosen that specific constraint rather than blowing all progress to smithereens.

Final Thoughts

Financial self-sabotage is a reason that many people end up in a cycle of getting ahead a little and then falling back into the same financial hole, over and over again. There are a lot of causes for it and a lot of strategies for addressing those causes.

If you find yourself regularly sabotaging your own financial progress, try some of these practices. You may just find that they lead you down a better, more permanent path.

Good luck!

Trent Hamm

Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.