5 Reality Checks to Fix Your Finances

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by Alfred Edmonds, Jr. | BlackEnterprise.com

One of the challenges of financial education is trying to get through to people who refuse to believe that water is wet, and think the rules of smart money management do not apply to them.

The problem is not that there’s an exception to every rule, but that people always want to believe that they’re the exception. The result: they fall victim to the same money mistakes over and over again, always hoping that this time will be now. Here are a few reality checks.

Fake it ’til you make it is FOOLERY! 

Too many of us are living the life celebrated in the hip-hop ditty “Still Fly” by Big Tymers: “Got everything in my mama name, but that’s okay, ’cause I’m still fly.” This “hood rich” mindset says that you need to look rich by any means necessary. This includes doing things that will destroy your finances, such as paying bills late (if at all), abusing credit, overspending and piling up debt, believing that if you look the part, wealth will somehow be magically attracted to you.

(A faith-based variation on this theme, “name it and claim it,” justifies buying things that are clearly beyond your means, like a brand new luxury car, as an act of faith in God, who will miraculously give you the means to pay for it, because you are “blessed and highly favored.” I’m no theologian, but I believe deliberately and unnecessarily overextending yourself financially in order to trigger a divine bailout is testing God in a way the scriptures specifically tell us not to do, as Jesus says in his response to the temptation of Satan in Matthew 4:5-7.)

Reality: Wealth is about delaying gratification, saving and investing, and living within your means. That doesn’t mean you have to look broke, busted and disgusted. But it does mean that you need to live according to a budget, and buy only what fits into it. Don’t drive yourself to the poor house trying to fool others—including yourself—into believing you can have it like that just by looking like you do.

This is one of the most important reality checks you need to accept: Don’t fake it ’til you make it. Focus on making it, so you don’t have to fake it.

There is no “secret” way to get rich.

You see—and long (lust) for—what other people have. The big house. The fly car. The designer clothes. The perfectly maintained weave. “How did they get so rich?,” you wonder. “What’s their secret?” The answer: There is none. I repeat: There is none.

Reality: There is no secret, magical, miraculous way to get rich quick—wealth building is a marathon, almost never a sprint. Unfortunately, people’s desire to believe otherwise makes them vulnerable to all kinds of financially destructive choices, from falling for misleading sales pitches to being outright scammed by con artists. For the most part, the ways you can get rich boil down to about a dozen or so options, give or take—Ken Fisher identifies ten in his book, The 10 Roads To Riches: The Ways the Wealthy Got There (And How You Can Too!), one of my favorites. All of them require some combination of time, hard work, discipline, focus, sacrifice, self-education and a willingness to accept risk and delay gratification in order to get wealth, and perhaps more importantly, to keep it. None of them are secrets.

Stop looking for the secrets of … (continue reading 5 Reality Checks You Must Face to Fix Your Finances via BlackEnterprise.com)