Are you stuck in a money trap?

By MP Dunleavey

Most money problems are pretty dull. What's gripping are the financial car wrecks: watching someone drive themselves into a pit, repeatedly, despite their best intentions.

It's the people who worry they have no retirement savings but must drive a new luxury car. Or who know things need to change but are unable to take control.

What's going on there? I've often wondered, and then a recent conversation with my cigar-chomping editor sparked an answer: If you're a repeat money offender, chances are you're stuck in a mental money trap that has misguided your financial actions for a long time.

A money trap isn't like a bum mortgage deal or bad credit card agreement. It's when you're stuck in the wrong mental gear and acting from a set of principles that are so nonnegotiable that you find yourself driving into the same quagmire time and again.

3 case studies

Let's look back at some of the harder cases that have come through Women in Red headquarters, including three women whom I was never able to help, nor were able to help themselves:

Anna was a new mom and breadwinner who believed the power of her own frugality and common sense could make up for her husband's total disinterest in financial reality.

A hardworking Washington, D.C., lobbyist, Anna earned a modest income and managed to buy a house, but her husband kept making terrible financial mistakes. "My husband thinks 'plan' is a four-letter word," she said.

Anna struggled for years, but her husband's lack of financial cooperation left her falling further and further behind. She just couldn't let go of the idea that she could do the thinking (and planning) for both of them. I call this money trap the "Casablanca" syndrome.

Marian was a divorced mother of two, one of whom had a learning disability. Despite her limited salary (she was starting a business), she was taking out tens of thousands in home equity to pay for a special school for her child.

Although many parents go to the ends of the earth to help their children, Marian went further than most people would go, borrowing against her home (which was her only asset and had been fully paid for) and justifying the enormous debt in the name of her child's future.

It was a tough call. As a mom myself, I deeply understood her need to help her child. But not at the expense of her own stability as a single parent. Marian was caught in the money trap I've dubbed "all you need is love," with her decisions driven by the self-sabotaging belief that money doesn't matter and that you can afford to ignore financial reality in the name of a greater cause.

Brice was a striving freelance writer trying to fix many financial failures -- chronic debt, no savings, scant retirement funds -- and kept stumbling.

Brice and Mia (aka yours truly) manifested many of the same symptoms: procrastination, inertia, helplessness and cluelessness around all things financial.

In the end, we were poster kids for two types of money traps. I call hers "someone else will save me," the belief that you'll be rescued by someone or something. And for a long time I thought I was in that trap, too, until I learned what was really holding me back.

Roadblocks to success

Most of us blame our financial misdeeds on a familiar lineup of external factors:

• Anxiety or fear.

• Not having enough money.

• Lacking sufficient time.

• An uncooperative spouse.

• Laziness.

• Did I mention fear?

In fact, those are just symptoms of whatever money trap you're in, and each manifests in different ways, according to your psychological makeup.

Here are seven money traps I've identified -- and my own revelation that finally helped me to break free. See if you recognize yourself in one of these:

1. 'Someone else will save me'

Secret belief: You don't have to manage your money because someone or something is going to gallop to the rescue. Any minute now.

Telltale emotions: anxiety, helplessness. You wish to be comforted.

Red flags: You keep dropping the ball. You procrastinate. Your head is in the sand, and you won't dig it out. You have piles of unopened bills.

2. 'It's not my job'

Secret belief: Money is beneath you. You loathe dealing with it, even though you may be quite well off.

Telltale emotions: aversion, indifference. You feel a need to focus on higher causes.

Red flags: You rely on your mate, a parent or an in-law to make financial decisions for you. You're conservative, which gives you a false sense of security. In reality, you have no control over your own finances.

Continued: 'Money doesn't matter'

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