One reason many people have so much trouble with their finances isn't a lack of knowledge, but that they look for quick fixes rather than taking steps to correct the situation.
They continue this pattern time and again rather than making the commitment to make a fundamental change that is needed to get the desired results.
The evidence is all around.
Take the current debate between presidential hopefuls. Sens. Hillary Clinton (D., N.Y.) and John McCain (R., Ariz.) have been promoting the idea of a gas tax holiday where the federal tax that is currently levied on gas would be removed during the busy summer driving season months to help people struggling with the price of gas.
Problem is, economists say that doing this will not help lower the price of gas or put money back into the pockets of the people that it is supposedly supposed to help. It does, however, sound like an easy quick fix that takes no effort on the part of people so it's viewed as a good thing by many.
The fact is that people would save much more money by simply reducing their driving speed from 65 to 55 on the highway, but you don't see any politician promoting the idea of making the speed limit 55 mph again. That is because it would mean that people would have to do something they don't like to do, namely, drive slower.
It's the same reason that diets don't work. Study after study shows that when people diet and lose weight, they will eventually gain the weight back. The reason is that they are focused on short-term solutions to losing the weight and once they have done so, they go right back to their old habits that put the weight back one. To keep weight off, a person has to make a fundamental change in the way they eat and continue to live that way for the weight to stay off.
The same is true with personal finances.
One reason that people are struggling with finances now is because of the quick fix decisions they made when times were better. When people had credit-card debt, instead of making the change of spending less than they made, many opted to refinance their home to pay off their credit card debt at lower interest rates.
This seemed to have been an easy solution to the problem until they found that it only delayed the problem. It wasn't long before they found themselves in credit card debt all over again when they continued to spend like they had previously been spending. They had opted for an easy fix instead of a fundamental lifestyle change that they needed to make.
Getting your finances in order isn't all that difficult, but it does take commitment and the realization that the solution will take time and effort.
Before anyone can have success in changing their financial situation, that have to understand the following:
1. A change in current lifestyle is necessary
: If you are having money problems, they are in most cases a direct result of how you are currently living. In some fashion, you are spending more money than you make. In order to get control of the problem, you are going to have to change your current lifestyle. That usually means one of two options: making changes to save more money or making changes to earn more money.
2. It will take time and effort
: Unfortunately, the easy fix doesn't exist or you would have already found it. That means that getting the financial results that you desire is going to take some work and sacrifice on your part. Change is never easy and in order to make the change happen, you are going to have to exert effort. If you are unwilling to do this, then the changes that need to be made will ultimately fail.
3. The changes are not temporary
: You need to realize and accept the lifestyle changes you decide to make aren't temporary, but a new lifestyle choice. Just like dieting, if you go back to your old habits, you will find yourself in the same financial situation even if you succeed in making temporary changes now. When you have accepted that you are making permanent changes about your finances that you are willing to incorporate into your life, then you have the basics of what you need to succeed in getting your finances in order.
How difficult and painful these changes will be depends greatly on how bad your current financial situation is. For those with a few bad habits it will be a lot less of a struggle to change than for those who have a lot of debt and spending habits that need to be changed.
The good news is that the decision to make the fundamental change itself and accepting that this is what has to be done is usually the hardest part. Once the decision has been made and embraced, there is no longer resistance to what needs to be done and accomplishing the financial goals becomes a lot easier.
No matter how difficult it is to listen to, taking the steps to get your finances in order requires you to move beyond the belief that there is an easy solution that won't require any work or sacrifice.
No matter what all the TV advertisements say and no matter how hard you search, you won't find one. Your financial freedom starts first and foremost with the decision that fundamental changes to your finances are required and until you make that commitment, nothing will change.
Jeffrey Strain owns and runs SavingAdvice.com.