- A Behavioral Bubble
- You're in Control
- Facing the Enemy
- Psych It Up
This chapter is from the book
This chapter is from the book
This chapter is from the book
You're in Control
The fact that you hold the power to control your financial destiny can be intimidating. But, it's indecision that is the real enemy. The fear of making the wrong decisions is paralyzing and can potentially jeopardize your security, finances, happiness, and health. After all, financial choices affect how well you can provide for your family, how early you can retire, how much house you can afford, and whether you can start your own business some day. But, the truth is, when it comes to finances, we all possess the ability to control the way we think, behave, and act.
As a journalist who covered this area, I hoped everyone would agree that his or her personal finances were a priority and would want and need guidance in this department just as much as with issues pertaining to health, relationships, and careers. But while I was closing issue after issue of the magazine, growing more convinced that there was no end to giving away financial prescriptions, consumers were not quite tuning into the money-savvy messages spilled all over the media. In fact, many were in a major financial rut.
A decade later, the stats speak volumes about our long-running reckless ways:
- The average household carries roughly $10,000 in credit card debt, according to the Federal Reserve.
- Foreclosure experts at RealtyTrac predict four million homes will receive a foreclosure notice in 2010, about the same as in 2009.
- Expect more than a million individuals to file for bankruptcy in 2010.
- The Census Bureau estimates that by the end of 2010, there will be nearly 181 million credit card users in the United States, an increase from 159 million at the start of the millennium.
- Our collection of credit cards, when piled up, can physically reach more than 70 miles into space, and be as high as more than a dozen Mount Everests, according to researchers at CreditCards.com.
It's not a delightful picture. Financial advisors and journalists have tried hard to boost financial literacy, but have people been really listening or trying? I can see that our work has helped educate people on how to save more, spend less, and make wiser choices with their money. But can we execute on what we know? We still struggle to mobilize ourselves, to turn knowledge into action. Despite colorful lessons about credit scores, annual percentage rates, and the perils of overdraft fees, we're still a debt-ridden nation (especially younger adults). We tend to repeat our mistakes and perpetuate the cycle of debt. Why as a group are we such money zombies? And what does it take to really get a grip on your financial life?