Here and Now

Notes From The Financial Shepherd

Why Dollars + Change = Sense by Glen Wright and Sy Pugh

The next step to overcoming failure in finances and being a good financial steward is understanding that choices have consequences. When looking at the past, present, and future, we must realize and accept that the only thing we can control or change is the “here and now.” We are in a present state of being because of what we did in the past. And even though we cannot change the past, we can glance back over our shoulder to learn from past experiences (good or bad) and then adjust our behavior to make different or better decisions in the future. Even though we can’t predict or dictate future occurrences, we can make decisions that will positively affect our future results.

Every financial choice you make (or have made) has a specific consequence attached to it. For example, when an entry-level employee chooses to spend his or her paycheck on shoes and a new outfit instead of household bills, the resulting consequence is much greater than just the money spent on clothes and shoes. Although the material value of the items might be $250, the perceived value of loss is much greater. In addition to the replacement funds that must cover the bills, there are also the added costs of late fees and penalties for not paying bills on time, the immeasurable loss of trust because the individual was irresponsible in spending, and the intangible expense of time loss and extra work that has to be done to compensate for the original error in judgment. The added stress created by not making a good decision in the first place can have an adverse effect on future job performance—which may have even greater financial consequences—and also negatively impact one’s health due to unnecessary stress. As the saying goes, ‘we don’t get ulcers by what we eat, but by what’s eating us.’ Unfortunately, poor financial decisions always cost more than they’re worth.

Depending upon how much money you’re talking about, some financial choices have long-term consequences that may take years to overcome. For example, I have a client that suffers from major chronic depression. She went through a painful divorce and proceeded to self-medicate through shopping and maxing out her credit cards to make purchases that had previously been denied because of a “very controlling husband” who would not approve such purchases. As a result of her shopping spree, she has since accumulated more than $21,000 in credit card debt in the past year. The truth is that she cannot change or control what has already occurred in her marriage, and she cannot control what additional challenges the future may bring. However, she can learn from her mistakes and choose to make different decisions based on past lessons learned. She can either choose to continue the same destructive path she’s currently on, or she can choose to follow a new plan that has been developed and presented to her in order to create the future she desires. Ultimately, the choice is hers. Similarly, the choice is yours.