The Most Dangerous Habit in Personal Finance…

…is swinging the pendulum too far and too often.

A Question of Balance

Reading personal finance blogs can be hazardous to your health. I don’t mean stop reading; just do so with an understanding of where I and most other bloggers are coming from.

We like to challenge the status quo, to push to the extremes until a good middle ground is established, the conventional approach to personal finance. It’s less often a single person’s perspective and most often the sum of everyone’s thoughts.

On the list of personal finance principles, balance ranks pretty high for me. Time and time again, the results of many debates are that there is no clear answer—it lies somewhere in the middle.

Trying to bounce between financial opposites is like yo-yo dieting: effective in the short term, but a horribly poor way to get anywhere in the long run.

Action Items

Today’s post is short, but I’d like to impart some concrete strategies to avoid pendulum-swinging:

  • Stop chasing every new idea or tool you come across. Evaluate in your money lab first, if possible.
  • Keep some financial “mass” on you—flexibility is an asset, but it’s okay to turn the ship a little slower when you’re evaluating alternatives to the way you’re working now.
  • Avoid getting too far in any direction, since the danger is a strong bounce-back. Examples include many of the “classic debates” I talked about in this post, like extreme frugality, or saving 95% of your income.

Don’t be afraid to think outside the box, but be afraid of burn-out when chasing anything too far in the extreme.

Photo by Phillie Casablanca

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2 thoughts on “The Most Dangerous Habit in Personal Finance…

  1. Great post and I absolutely agree. If you spend say 3 weeks spending nothing it’s likely you will find yourself having a spending blow out of monumental proportions. Balance is key!

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