I was working with my leadership coach today and during our discussion, he stated something that was profound to me.
He stated that when it comes to making change happen, incentives work, fear may help, but making it part of a cause really makes it happen.
Let me break it down as it applies to personal finances.
Incentives work in helping you change your finances. If you have a 401(k) retirement fund (or something similar like a 403(b)) at work, your organization will many times offer to match a portion of your contribution. Because of this incentive, you company hopes that you may be more inclined to change your finances and contribute toward your retirement fund. The government also provides an incentive to contribute toward your retirement by offering to not tax your money until you begin withdrawing it during retirement. This allows you to utilize the tax dollars to gain additional growth.
Fear helps by driving you toward some other decision just because the other alternative is just so bad. You may have gotten into deep debt in the past. As a result, you nearly lost your house to foreclosure. Fear of that situation may drive you to avoid obtaining debt again.
I propose that really changing your personal finances happens when it becomes part of a cause. If your wife really wants to stay home and raise the children, but you really need to make a change in your financial management to make it happen, you have a cause to fight for. If you really want to pursue a job as a teacher, but it makes way less income than you currently make, you have a cause to fight for. If you want to go to college, but you do not want debt, you have a cause to fight for. If you have a very sick child who needs a lot of expensive medicine, you really have a cause to fight for.
When you have a true cause to fight for, that is what makes true change happen. Why? Because while incentives and fear help drive some change, it is generally temporary because external events are driving the behavior. With a cause, however, an internal desire drives the behavior. When it becomes internal to your very being, change will happen.
What cause are you managing your finances for?