Are You Sabotaging Your Own Financial Goals?

by Gary Foreman

When it comes to our finances, we can be our own worst enemy. Find out if you might be sabotaging your own financial goals without knowing it and what you can do to turn that sabotage into success.

Sometimes finding out where your money is going proves to be an interesting journey.

And it can tell us a lot about how we perceive and achieve, or fail to achieve, our financial goals.

What I Learned About Financial Goal Setting From My Electric Bill

I remember years ago when I wanted to reduce our electric bill. It was summertime in Florida. I put the family on notice that we were going to reduce our electricity consumption. And we did. The lights went off. The thermostats went up. My wife and kids were helpful.

The following month our bill came, and it was down substantially! We had won! Of course, being a bit of a fanatic, I decided that we’d really attack our bill the following month. So I got even more aggressive in finding ways to cut power usage. This time my family began to grumble a little. And, they probably had a point. August in Florida is no time to see how little you need the air conditioner!

Finally, the electric bill arrived. I was about to be vindicated! But, wait. What’s this? The bill was almost as high as two months ago before we started all the energy-saving moves.

How could that be?

It took a little tracking, but I figured it out by looking at old bills and doing a little detective work. There was always one month in past summers when our bill was lower than usual. And the following month always had higher than typical usage.

It wasn’t until the following summer that I finally realized what had happened. I just happened to be home when the meter reader came through our neighborhood. To my surprise, they didn’t visit every house. I can’t be absolutely sure, but it appeared that in the summer, they’d skip some houses and enter an estimate of usage for that house. They’d purposely guess low so that the homeowner wouldn’t complain. Then the next month, they’d read the meter, and the electric company would get what they were due.

It was just a coincidence that the first month of my savings plan happened to coincide with the month that our meter wasn’t read, and a low estimate was used to calculate our bill. Ultimately, we did find a way to reduce our bill. Our air conditioner was 12 years old. And even though it cooled, it wasn’t that efficient. So, we replaced it with a more energy-efficient model.

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How To Avoid Sabotaging Your Own Financial Goals

Why do I tell this story? Because it demonstrates a lot about achieving financial goals. And the many ways that you can sabotage your efforts. So let’s see what we can learn.

Are you sure that you know what you know?

Sounds strange. It should. But the question is important. You’re basing your decisions on certain assumptions. Are those assumptions valid? In my case, I assumed that the electric bill represented the amount of electricity we used the prior month.

It turns out that wasn’t always true. At least it wasn’t true during the two months that I counted on. So I really didn’t know what I thought that I knew. It pays to examine your assumptions. Test them if possible. It’s foolish to build anything on a shaky foundation.

Enlist your family to work with you.

It’s easier to accomplish a goal as a team. Because I made reducing the electric bill my mission, my family felt that their efforts were unnecessary. In fact, by nagging, I probably pushed them into hoping that I’d fail.

Instead, I could have asked them to help analyze the problem and set the goal. That would have made them partners in the solution. Not only would I have gotten help reaching my goals, but also I would have created a teachable moment.

Trends tell you a lot more about what’s going on. They usually indicate an underlying, ongoing situation. If your bill goes up (or down) month after month, you know that whatever is causing it isn’t likely just to disappear.

I went for the flash of two electric bills. One was high, and the other was low. I would have been better off with a goal to reduce the bill by 15% over six months. I could have avoided using insufficient information to make a decision. And, any change in the way our family consumed electricity would have been much more likely to become permanent.

Sometimes you find answers in unusual places.

I expected that turning down lights and adjusting the thermostat would be the solution to lower bills. Then I thought it was the meter reader! It turns out that, ultimately, the answer was a new air conditioner.

Don’t be afraid to go where the leads take you.

Be prepared for mid-course corrections.

It’s easy to go in a straight line. Pretty much anyone can do that. But, if you’re heading in the wrong direction, you won’t reach your goal. You’ll need to adjust your course.

Nothing is surprising about that. If you take a driving vacation every so often, you look at a map every so often. You may find it necessary to change your route.

That’s just what we do with financial goals. We need to continue to collect information. And, then we need to take appropriate action based on what we’ve learned. New information led me to a couple of course corrections in my search for lower electric bills.

We finally did get a lower bill. A combination of turning off lights and a new air conditioner did the trick. It took us a while, but that’s ok. Not only did we reduce expenses, but also we learned a lot in the process!

About the Author

Gary Foreman is the former owner and editor of The Dollar Stretcher. He's the author of How to Conquer Debt No Matter How Much You Have and has been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com.