Once you've decided to clean up your financial life, make sure you don't get sucked into a maelstrom you can't get out of. These five traps will definately impeded your progress.

All Or Nothing Thinking

This is when you think, if I can't do it perfectly, I won't do it at all. You plan to spend $100 at the grocery store, but you spend $125.

Antidote: think of your goal as a target. Although you missed, it's better than not having tried at all.

Unexamined Spending

Many of us are guilty of buying things that add nothing to our lives. We buy things impuslvely. For some people, it's hard to predict how doing without the item will make them feel.

Antidote: put money in categories for specific things, like the car payment and dry cleaning. Our app, launching at the end of the summer, 2011, does just that. You see where your money is going and it has a purpose; it makes spending more concrete. You might want to ask yourself what else you could buy with the same amount of money.

Cut out an unneeded expense and see how you feel after a couple of weeks; have you really missed it?

Fixating On The Future

So you dream about what it will be like when your debt is paid off. Then you start thinking, that'll be six years in the future. Next thing you know you've sabotaged your plans. It happens to athletes when they start on a long run and they think they have 19 more miles to go, only after the first mile.

Antidote: make a plan and stay in the present. Congratulate yourself on your accomplishments. Pat youself on the back for a job well done when it's deserved.

Avoiding Money

Yes, I've had workshop participants tell me they haven't opened their latest credit card statement because they don't want to know what's inside.

Antidote: knowing that uncertainty creates fear. Fear makes life intolerable. If you track your spending, you'll know what's on your credit card statement.

Punishing Yourself

Many people will eliminate everything frivoulous from their spending. Well, I really cannot argue with that, but there are some things that should remain if it makes your life enjoyable.

Antidote: keep the less expensive non-essentials, such as going to Starbucks, but only once a week. Even people on a diet can have chocolate cake occasionally.

Have you fallen into any of these traps?

CategoriesSaving Money