Spiraling into financial failure? Your wealth-limiting habits are to blame

April 10, 2012—Provo, UT—A new study from New York Times best-selling authors Joseph Grenny and Loral Langemeier shows that over the past five years, three out of five people have failed to meet their financial goals; despite this, 76 percent are doing little to change their spending and saving behavior.

The online poll of more than 1,000 participants reveals why the last five years have left ugly scars on people’s personal finances, and the financial downturn is only part of the problem. Most report that they’ve failed to adjust their habits to new realities. As a result, two-thirds are currently in financial trouble and only 6 percent are on track to save enough for retirement.

Grenny, author of Change Anything, and Langemeier, author of Yes! Energy, say the failure to kick bad spending and savings habits isn’t necessarily because people are apathetic to change; rather the world is perfectly organized to cause them to spend more and save less.

“We often believe the success of our goals hinges on our ability to summon the necessary self control or willpower,” says Grenny. “But the truth is, we’re powerless to change our financial habits until we recognize the enormous number of influences that suck us into financial self-destruction. The key to change is not just to beat yourself up, but to take control of the influences around you.”

Grenny says examples of influences that govern our financial habits include:

  • Internet bookmarks – if your home page is Nordstrom, you think about Nordstrom and what you think about you eventually buy.
  • Accomplices – if all you talk about with your friends is fashion, you will acquire more clothing.
  • Wicked incentives – merchants masterfully use incentives to make you feel like you’re losing out if you don’t make a purchase.
  • Credit cards – research shows the further we get from paying with cold, hard cash the more likely we are to blow our budget. Casinos use chips rather than cash for this very reason.

Langemeier says that in addition to powerful external influences, our attitude weighs heavily on our ability to change long-standing financial habits.

“The tough financial pressures from the last five years have left most people in a state of no energy and dwindling motivation,” says Langemeier. “We can open ourselves up to greater success and financial freedom by saying ‘yes’ to the opportunities before us.”

While 76 percent are stuck in a cycle of bad habits, what do the successful minority do differently?

According to the study, the average person’s plan to gain control of his or her finances includes trying one or two behavior-change tactics such as cutting up a credit card or unsubscribing from coupon mailers. However, those who boosted their plan to include four or more tactics were 53 percent more successful in reaching financial goals.

Here are the financially fit’s top five behavior-change tactics for meeting their short and long-term financial goals. Grenny and Langemeier say the key to success is to do all five of these, or similar tactics, in combination:

  1. Keep score: Track and review past spending. Mindless spending is the real enemy. Tracking expenses increases your awareness and motivates you to improve.
  2. Learn what you don’t know: New habits always require new skills. Changing spending habits means learning new skills like budgeting, reducing expenses and replacement behaviors.
  3. Step away from accomplices: Avoid groups and activities that are likely to cause you to spend more than you should.
  4. Reward yourself: Look forward to inexpensive or free treats after achieving spending and saving goals. It takes very little to make yourself feel good for accomplishing a short-term goal.
  5. Make the easy cuts: Everyone could cut 5 to 10 percent of their current spending without creating much pain. Consider reducing utility bills, cutting extra cable channels you don’t even watch, or discontinuing data plans or magazine subscriptions.

About Joseph Grenny:
Joseph Grenny is a behavior change expert and the four-time New York Times best-selling author of Change Anything: The New Science of Personal Success. Grenny has conducted more than 25 years of research in behavior change and interpersonal communication. He is also the co-founder of VitalSmarts, an innovator in corporate training and organizational performance. www.changeanythingbook.com

About Loral Langemeier:
Loral Langemeier is an innovative money expert and the five-time best-selling author of Yes! Energy: The Equation to Do Less, Make More. She accelerates the conversation about money, sharing how to not just survive this tough economic climate, but how to succeed and thrive. As Founder and CEO of Live Out Loud, Inc., Langemeier travels the world as a leading entrepreneurial speaker, coach and mentor. www.yesenergybook.com

Note to editor: Joseph Grenny, author of Change Anything, and Loral Langemeier, author of Yes! Energy, are available for interview. Copies of the books are available upon request.

About the research: The study collected responses via an online survey tool from 1038 individuals. Margin of error is approximately 3%.

Laura Potter of VitalSmarts, L.C. +1-801-510-7590, or lpotter@vitalsmarts.com.
Lindsay Sherman of Live Out Loud, Inc. +1-415-475-4990, or lindsay@liveoutloud.com.

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