Do You Have the Financial Discipline to Say No?

When it comes to finances, one of the most difficult things to do is to say no. Whether you are saying no to yourself, or saying no to someone else, it can be hard to exercise the discipline needed to say no. But, sometimes, it's necessary. 

Saying No to Yourself 

One of the toughest things to do is to say no to something you want. If you are trying to pay down debt, you have to say no to a night out on the town, or to those new shoes. If you aren't comfortable with the monthly payment, you have to say no to the nicer car or bigger house that you want. If you have to stretch your finances to "afford" something, you probably can't actually afford it - and you need to say no. 

In some cases, though, the no is only temporary. It doesn't have to be a permanent no. You can save up for what you want. This is an important concept. You need to have the discipline to wait to purchase an item that isn't immediately affordable. Create a plan to help you save up for what you want. That's the way to turn no into later. 

You also have to be willing to say no to the less important purchases in your life. Sometimes, we get caught up in spending, and find that we run out of money before we get to do the things we really want. Prioritize your spending so that the most important items are covered first. If you really want to go on a cruise, set aside money to save up for your trip before you go to the movies. Selectively saying no to the less important items in your life is an important part of developing the discipline you need to spend money on what is truly important to you. 

Saying No to Someone Else 

Sometimes, it's actually harder to say no to someone else than it is to say no to yourself. However, there are times when saying no to someone else is just as important - or even more important - than saying no to yourself.  

When you are always saying yes to others, you can easily find yourself in financial trouble. Some of the ways that you can get into trouble, financially, because you don't want to say no to someone else include: 

• Becoming responsible for someone else's loan when you co-sign: If the borrower doesn't pay, you are responsible for repaying the loan. Even if the borrower does make regular payments, your credit is affected by loans you co-sign. 
• Paying for college at the expense of your retirement: One of the common pitfalls in recent years has been raiding the retirement fund to cover kids' college costs. Another issue might be that you pay for college before saving for your retirement. Don't do this; the popular saying is that, "There are loans for college, and no loans for retirement." 
• Constantly providing money to someone else: While you want to help someone who needs it, you don't want to cross that fine line into enabling. You don't want to be constantly applied to for a bailout for friends and family, since it can put your finances at risk. 
• Buying MLM products or "hot" investment opportunities: When a friend or family member asks you to help out by purchasing something, or by investing in a "hot" opportunity, it is often a good idea to say no. While buying an affordable item or two might be acceptable to help someone meet a sales quota, you don't want to commit to huge or bulk purchases. If you are offered a "hot investment opportunity," it's best to run as fast as you can the other way.

Before you say yes to someone, whether that some is a friend or relative, or whether that someone is you, stop and think about your financial situation. Evaluate the possible consequences of your action, and consider whether or not you are reaching your goals by spending the money. You should also honestly evaluate whether or not your expenditure will truly help the person claiming to need the money. 

If you are putting yourself in harm's way financially, you need to say no - even if it is difficult.

Photo Credit

Miranda Marquit

Miranda lives in Utah and is a freelance writer and professional blogger, specializing in topics related to personal finance and business. Her work has appeared in, and been linked to from, a variety of publications, online and offline. Miranda blogs for a number of web sites, and has her own personal finance blog, Planting Money Seeds.