Understanding Your Money Mindset to Avoid Committing The 7 Deadly Financial Sins
I am not a money coach and do not aspire to be one. Through reflection, I realised that the seven deadly sins can apply to almost anything. Since I want to have a better relationship with money, I drew up a financial review to identify any limiting beliefs or behaviours that were holding me back from achieving my financial objectives.
We have heard the idiom, money makes the world go round, as much as I disdain the obsession with money, it doesn't take away the fact that money is an essential part of our lives, and we all strive to make the best use of it or to have financial freedom. However, the road to financial success is not always smooth. There are several pitfalls that one can fall into if we are not careful. These pitfalls are known as the Seven Deadly Sins of Finance, and we will explore what these sins are and how you can avoid them to achieve financial success.
Greed is the excessive desire for wealth and material possessions led by our passion.
More is never enough. It is the insatiable desire, often at the expense of others through manipulation, to obtain a status or more possessions. It can manifest in many ways such as gambling, narcissism, selfishness, engaging in unethical or illegal practices, being too possessive, or even refusing to set healthy boundaries. This can lead to taking on too much debt, overspending, and investing in risky ventures. To avoid the sin of greed, it is essential to practice self-control and discipline whilst cultivating a sense of empathy and generosity to shift your focus away from self-centred behaviour towards a more altruistic and community-orientated approach. Also, you will need to add, setting realistic financial goals and avoiding comparing yourself to others.
Envy is the desire to possess something that someone else has. It doesn't mean that you cannot be aspired by them or their accomplishments, but it doesn't bring out the green-eyed monster in you.
We can all be guilty of this from time to time, but keeping up with the Joneses is a fast way to get yourself broke, and that's what being envious does. Social media encourages this downfall, as it will have you looking at people's lives through rose-tinted lenses, and if you are not careful, compare your journey to their facade. Being envious has a dark side, stirring up feelings of inferiority and insecurity, and can manifest itself through a lack of gratitude, gossiping, sarcasm, and scheming to destroy others whilst trying to elevate yourself. This behaviour can lead to irrational decisions, overspending and accumulating debt just to impress others. To avoid the sin of envy, it is important to focus on your own financial goals and not compare yourself to others. Remember, your time will come. Everyone has different circumstances, and what works for one person may not work for you.
Gluttony is 'the guilty pleasure' masked behind the innocent phrase of retail therapy, just to satisfy our excessive consumption of lifestyle inflation.
Consumerism at its finest! When financial behaviour is driven by the desire for immediate gratification and indulgence whether it be in money, a luxury lifestyle or material possessions, it can lead one to long-term financial instability. The idea of living in the spur of the moment often creates a distorted sense of priorities whilst ignoring financial responsibilities, which can lead to overspending and accumulating debt. Gluttonous behaviour begins when we spend money we don’t have to make purchases we don’t need or can’t control our spending. It is a habit that manifests in hoarding money without a clear purpose or plan, compulsive shopping, wasting resources, bad investments and overspending. To avoid the sin of gluttony, it is important to practice self-control and discipline. Create a budget and stick to it. Avoid impulsive purchases and focus on your long-term financial goals.
Sloth is the avoidance of taking an active role in managing one's finances.
The lack of motivation or effort to take control of your finances will impact your financial well-being i.e., your credit score, and cause you unnecessary financial stress and hardship. Slothful behaviour can lead to financial difficulties which manifest in various ways, such as passive aggressiveness, adopting a complaining attitude, procrastination, missed bill payments, not monitoring your spending, neglecting to save money, or failing to invest for the future, taking on too much debt or not having enough money for emergencies. To avoid the sin of sloth, it is important to take an active role in your finances. Create a financial plan, monitor your spending, and regularly review your investments. These actions require effort and discipline, but they are crucial to achieving financial success. Think of it like this, tending to your finances is like tending to a garden. If you're diligent and nurture your garden, it blooms. The same is true for your finances, but if you procrastinate and neglect either one – your garden or your finances – will both wither and eventually die.
Pride is the inflated belief that one is superior to others.
The sense of satisfaction, confidence, and accomplishment that comes from making smart financial decisions and achieving financial goals is something to be proud of. It can be a positive motivator driving us to save more, invest wisely, and make smarter financial choices. However, unchecked financial pride can lead to a sense of entitlement and arrogance. This manifests in relationship strain, poor decision-making, overspending, over-investing by believing you have more knowledge or expertise than you actually have to now take on miscalculated risks, and a reluctance to seek help or admit to mistakes which can lead to missed opportunities or costly mistakes. To avoid the sin of pride, it is important to humble yourself before you wreck yourself. Don't be afraid to ask for help and learn from those who have more experience, you truly do not know everything, and you are not always right.
Wrath is the overwhelming expression of anger and frustration, which can be challenging to deal with as it causes harm to yourself and others.
Many people experience feelings of wrath towards finance and money management due to a variety of reasons, such as past financial mistakes, lack of financial literacy, or feeling overwhelmed by financial responsibilities. However, allowing emotions to control your relationship with money can have negative consequences on your financial well-being. Wrath towards finance and money management can manifest in different ways, such as procrastination, making impulsive investment decisions, taking unnecessary financial risks in an attempt to alleviate the negative feelings associated with financial stress, engaging in reckless spending habits leading to a lifestyle debt, whereby you continuously live beyond your means, and neglecting to seek professional financial advice. To avoid the sin of wrath, it is important to stay calm and rational when making financial decisions. Practise mindfulness to manage your emotions and reduce stress levels. Instead of getting angry and blaming everyone else, the best thing you can do is to take the time to evaluate what you can control and influence. Through this, you are more likely to take clear, practical action towards both a healthier relationship with money and your financial security and, when in doubt, seek advice from others before making a decision.
Lust is the excessive craving for personal pleasure and gratification.
While it's normal to desire financial stability, letting lust take over your personal finance can be expensive, and I'm not just talking about money, but time, and resources. When we let lust take over, we tend to make impulsive financial decisions that can have negative consequences, such as overspending, taking on excessive debt, or chasing unrealistic financial goals. To avoid the sin of lust, it is important to practice self-control, gratitude and discipline. Set realistic financial goals, create a budget, and learn to delay gratification and avoid impulsive purchases. Consider waiting 24 hours before making a purchase to evaluate whether it aligns with your financial goals and budget. Our relationship with money is complex and multifaceted. Shaped by our upbringing, values, and experiences, it can have a profound impact on our overall well-being and the quality of life we choose. In our pursuit of wealth, it is important that we do not lose sight of who we are and our values as we try to achieve financial freedom. But don't forget, materialism will not enrich your life. The Seven Deadly Sins of Finance is a mismanagement of finance in a nutshell, which can lead to financial ruin if not avoided, so it is important to practice self-control, integrity, and discipline, create a financial plan, and seek support and accountability. By avoiding these sins, you can achieve financial success and live a balanced life.