Money trouble? It's your own fault

"I should be able to live better than this." We hear all kinds of permutations on this theme on the Your Money board. The idea is that it's the high cost of living, rather than your own spending, that's causing your problems.

One reader who made $75,000 a year and who lived in an expensive area huffed that his family "shouldn't have to live like we're on welfare" in order to make ends meet.

Another, a single woman who made $50,000, complained that her fixed expenses -- taxes, insurance, mortgage, etc. -- ate up more than half of her salary, leaving her "only" $22,000 a year for her other living costs. She was oblivious to the fact that 20% of American households live on less than $20,000, or that a total income of $22,000 would put her in the top 10% of wealth globally. (Wonder how you'd rank? The Global Rich List offers a fascinating calculator.)

Both of these readers, and others like them, want to shift the blame for their financial problems to outside forces.

You can grouse all you want about "the high cost of living," but it's still your responsibility to figure out how to live on what you make. Trust me: There are almost certainly families bigger than yours living on less in your community, and doing it without going into debt.

OK, now what?

Where you live, what you eat, what you wear, what you drive and what you do with your time are all choices that you make and which have a powerful impact on your financial situation.

• Talk back: Are you alone to blame for your financial troubles?

If you need some ideas for how to trim costs, visit the Save Money and Manage Your Debt decision centers.

Maybe you're convinced, or maybe you still think you're faultless. Either way, let me suggest an exercise that could prove enlightening:

First, write down your five biggest money problems. Are you struggling with credit card debt? Getting squeezed by a big mortgage payment? Constantly running out of cash before the end of the month? Not saving enough for retirement? Whatever your most pressing concerns, write them down.

Figure out your part in creating them. What choices did you make that put you in this position? Even if you're not entirely to blame -- after all, things like bad health or bad luck can strike anybody -- what decisions or actions did you make that made matters worse? For example, did you:

• Spend more than you made?
• Fail to have a rainy-day fund?
• Try to get by with too little insurance?
• Fail to pay attention to the terms of the loan you were getting?
• Figure "something will work out" rather than having a plan?
• Procrastinate on dealing with an issue until it became a big problem?

These are just a few ideas. If you sit and examine the situation, you may find others.

Brainstorm some solutions. For now, remove the words "can't," "won't" and "but" from your vocabulary -- as in "I can't do that," "That won't work" and "Yeah, but . . ." Try to think of every possible solution you can, no matter how weird some of them might seem. If you're stumped, post your money problems on the Your Money message board and tap into the expertise of hundreds of other readers who have faced and conquered similar dilemmas.

Make a plan -- and follow through. Pick some solutions and get to work on them. If you've fallen behind on your mortgage payments, for example, talk to a housing counselor (read "Facing foreclosure? 9 options" for details). If you need a budget, create one. If you're truly sinking under credit card debt, contact a legitimate credit counseling agency, a bankruptcy attorney or both.

By doing this, you don't have to give governments, corporations and other institutions a pass. If you think taxes are too high or the health-care system's a mess, or credit card companies are getting away with murder, go ahead and contact your lawmakers to agitate for change.

But first make sure your own house is in order. Don't leave your financial well-being to the whims of others. Taking charge, taking responsibility and finding solutions is what empowers us and what ultimately lead to financial freedom.

Liz Pulliam Weston's new book, "Easy Money: How to Simplify Your Finances and Get What You Want Out of Life," is now available. Columns by Weston, the Web's most-read personal-finance writer and winner of the 2007 Clarion Award for online journalism, appear every Monday and Thursday, exclusively on MSN Money. She also answers reader questions on the Your Money message board.

Published March 29, 2007

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