How to Conquer the Money Fog!

By Mikelann Valterra, MA

"It's like I'm in a money fog -- I'm sick and tired of feeling like I am in a haze!"

I have heard this phrase numerous times. So many people feel like they live their life in a financial fog. They are "foggy" about the details. They are unclear about their credit card balances, and have no idea how much they have in the bank. Most times, they feel they are the only ones who experience this confusion and assume everyone else has it all figured out. Therefore, nobody talks about it.

As I saw this more and more over the years, I came to identify the “money fog” as one of the primary causes of financial stress and disarray. The dictionary defines fog as “an obscuring haze; a state of mental vagueness or bewilderment.” How often do you find yourself bewildered by money and what it is doing in your life? This ambiguity serves to reinforce the notion that it's just not possible to get in control of our finances.

Plainly said, to be in a money fog means you suffer from terminal vagueness over your finances. You may have a general idea about how much you have in the bank or how many checks are outstanding (or what investments you have), but you don't really know. If you are "foggy" about these details, it's no wonder you probably experience stress and frustration with money. Running your financial life from inside a haze is similar to driving in the dim fog. It is only a matter of time before you run into something. You can't see where you've been and you can't see where you're going. The problem is you simply can't stop using money. Hence, it is only a matter of time before you collide. Maybe it will be only a minor fender bender with a bounced check, or maybe a larger financial disaster is in the making.

If being continuously vague about money is so detrimental, then why don't people just snap out of it? Actually, many people don't even remember when the fog first descended. It feels like it has always been there, for as long as they can remember. And the truth is that vagueness serves us in many ways. If you were clear about your finances, maybe you would see there wasn't really enough money to keep doing the things you are doing. You can stay in blissful ignorance and hope everything is fine. Denial is a powerful thing.

Many people have certain areas where they know a lot of money is going, and they are uncomfortable with these areas in their life. Food is a common issue. If you are conscious where your money is going, you will become aware of how much you are spending on food or going out to eat. Clothes and shopping is another area. Many of us know we spend too much money on certain things, and to be confronted with this is uncomfortable. The financial fog helps keep us from looking at those things we would rather not see.

Often times we spend money to make ourselves feel better. Money can be a source of comfort, soothing our hurt feelings and loneliness. For example, when we feel lonely or abandoned, we may turn to the mall and go shopping. Many times we spend money in reaction to events in our lives without realizing why. The truth is that emotions almost always underlie our financial behaviors. We need to understand our emotions and make the connections to how we use money. Only then can we understand what may be fueling our potentially destructive behavior.

When the financial fog serves so many purposes, it is hard to dissipate. Yet it is clarity that leads to real freedom. We all have dreams and goals, but for us to arrive at our goals, we have to know where we are and where we want to go. You can't reach your dreams if you are enveloped in vagueness and uncertainty.

So where do you start? It depends on where you are. If you are mired in debt, then sit down and list out all your debt, with the balances and interest rates. Then go through each debt and think about where it came from. What did you buy when you "spent" this money that you have to pay back? You may be surprised that you honestly don't know. Yet this nebulous debt extracts an enormous toll on our lives.

If you think your spending may be out of control, it is time to track your expenses and find out exactly what is happening. As you track, you may notice different patterns to your spending. Do you spend money mainly on the weekends, or only when you are with friends? It is hard to just say "I'll spend less money" without really knowing what exactly is going on. Where are the problem areas and when are you most likely to spend too much?

Perhaps you feel fairly well grounded financially, and need to turn your attention to your investments. So pull out all your papers and start organizing. Before you can ask questions, you have to see what you have and what you know. Do you know what investments are earmarked for retirement and which for college educations? Do you understand your 401(k)? Where is the money invested and how much is it earning? You will undoubtedly be uncomfortable with all you don't know, but knowing what you don't know is a great place to start!

Becoming aware of living inside a "money fog" is the beginning of waking up. When your eyes are open and you begin to see clearly where you are, the clarity acts as sunshine and drives the fog away. Then in the clear light of day you can begin to see where you are, and more importantly, where you want to go.

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