How to end the cycle of financial self-sabotage

One step forward, two steps back. Is that what your financial life feels like?

You know you should save more, and you try – cutting spending, counting pennies, hunting for deals. But then a single “bad” day erases all your efforts.

Or maybe you’re a solid saver, yet you get drawn into financial deals or investments that seem promising but leave you back at zero.

Spending your life living high on the hog could be masking some deeper troubles with money.Credit: Simon Letch

How do you break the pattern? How do you stop sabotaging yourself?

The answer isn’t in tactical strategies or fancy spreadsheets. No app nor investment trick can solve this because, at its core, this isn’t really a financial issue – it’s a psychological one. Let’s take a look at what might be happening.

You aren’t on your own team

You are fighting yourself. Part of you knows you should save, but another part wants to enjoy life now. One part says to be responsible, while another chases riskier investments for quick gains. This inner conflict isn’t sustainable, and the constant back-and-forth will exhaust you over time.

The first step to addressing this is understanding why you’re in this battle. Here are some common patterns I find in people who have a lot of internal conflict:

• Harsh inner critic. Do you feel like you’re constantly failing the standards you have for yourself? Do you beat yourself up for every mistake? You think you’ll achieve more if you’re hard on yourself but the lack of positive reinforcement robs you of the motivation to keep going.
• Lack of internal drive. Are you driven by ‘shoulds’? You ‘should’ save more, spend less, be more responsible. Until you want to do those things it will feel like an uphill battle or chore.
• Resistance and rebellion. Is there a part of you that’s resisting some past or present feeling of control or authority? Maybe your parents or partner were overly controlling about money and now there’s a rebellious part of you that resists any form of financial restraint. The frustration that’s born from that resistance or lack of autonomy can manifest itself in rebellion.

Your current financial reality feels normal

On the surface you might not feel financially secure at all. However, if you’ve lived in some kind of financial struggle your whole life then that’s what becomes familiar (and therefore feels ‘safe’, in the sense that this is what is ‘known’). In this way you might have normalised financial beliefs and behaviours that may not serve your interests financially.

Your financial reality can be an interesting reflection of your internal one.

For example, maybe you’ve normalised being in debt, or living pay cheque to pay cheque. Maybe you’ve normalised a certain income level and can’t imagine earning double what you’re earning right now. Perhaps investing feels dangerous, based on experiences or upbringing (even though not investing is more risky in many ways).

In all these scenarios your desired outcome of a different financial reality can feel like an unattainable fantasy. So, even if you do temporarily make some progress, you might start to feel like it’s too good to be true, or it’s only a matter of time until the other shoe drops.

To maintain a new financial reality you have to allow yourself to create a new normal without living in fear that it’ll suddenly vanish or be taken away from you.

You are seeking emotional relief through financial decisions

Intellectually, you may understand what responsible financial behaviours would be better to engage in, but you might struggle with self-control in the face of emotional drivers.

Maybe you shop to alleviate loneliness, or overspend on social outings to fit in. Perhaps risky investments give you the adrenaline and fun you lack elsewhere in your life. Possibly you are driven to enjoy life now because you couldn’t as a kid and you’re making up for lost time.

These ulterior motives obstruct good financial decisions. You can get some immediate relief by trying to use money to solve emotional problems, but it won’t resolve the core problem.

To address this, start by looking at your bank statement and asking yourself why you spend money on the things you do. What emotional needs do those expenses satisfy?

What external influences might be contributing to your spending decisions? You’ll start to get a clearer idea of how you’re using money to try and meet emotional needs or resolve emotional problems.

Your financial reality can be an interesting reflection of your internal one. When you start addressing the thoughts, feelings and beliefs driving your financial behaviours you will be able to change your financial behaviours in a way that feels easier and more sustainable.

Paridhi Jain is founder of SkilledSmart, which helps adults learn to manage, save and invest money through financial education courses and classes.

• Advice given in this article is general in nature and not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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