Face your fears and put your finances in order

When it comes to money matters, do you have your head buried in the sand?

Are you pretending that tax time isnít right around the corner, that you can change your bad habits at a momentís notice or that the car isnít going to break down some day?

Ignore your problems and challenges and they will go away, right? Thatís what we want to believe. Thatís the easy way out. But, really, this blindness is a way of avoiding change and confronting our fears.

In her book Willful Blindness, Margaret Heffernan explores the psychological, social and organizational reasons that we are ďblind,Ē and she provides practical steps to help us regain our sight.

Heffernan says: ďOnly when we confront facts and fears can we achieve real power and unleash our capacity for change.Ē

Ask yourself these five questions to find out if you have buried your head in the sand:

1. How much money do I make after taxes each month?

2. How much money do I spend each month?

3. Do I have credit card debt?

4. Do I have an emergency fund?

5. Do I accumulate money each month for less than-monthly expenses?

When answering the first two questions, consider this: Determining how much money you make is the first step to understanding your true financial picture.

Once you know how much you make, you determine how much you can actually spend.

If you answered yes to carrying credit card debt, itís a sure sign you are living beyond your means and a sign you may be blind to your true lifestyle.

Building an emergency fund and saving for more-than-monthly expenses are about acknowledging the threats and uncertainty that exist in our lives.

When we donít face the fear that something unexpected might happen, we often ignore the very habits that could ease the pain when that unwelcome surprise comes around.

If your answers reveal that your head is caught in the sand, follow these four steps to free yourself:

1. If you are in a relationship with someone, communicate with your partner and acknowledge that you are in the financial situation together, and that together, you will sort out and manage your finances. Resist the urge to blame each other or yourself.

2. Get an outside perspective on your money. Itís important that we consider the hard questions about our finances, but asking those questions by ourselves can be daunting.

Getting an outside perspective can be as easy as meeting with a trusted friend, your investment adviser or coach.

3. Tell yourself the truth by making a budget and adding up your debt. When we get the facts out in front of us, we can face our fears. In my experience, the truth is not as scary as the unknown.

4. Exercise! Yes, exercise releases endorphins that help you hold a positive view about life and your situation.

Use tax season to begin the process of understanding your financial circumstances. Then, use this knowledge as a foundation for change, and take ownership of your future.

matt.kelly.durango@gmail.com Durango resident and personal finance coach Matt Kelly owns Momentum: Personal Finance. www.PersonalFinanceCoaching.com.