Unexpected Consequences of Economizing Unwisely

A friend of mine realized he was in over his head on his credit card debt and borrowed money from his IRA and paid off his cards and all outstanding bills.

You would think that this action would have put him into a wonderful frame of mind now that he was no longer worrying about keeping up with crushing interest payments.

He came to me because he no longer felt motivated to work, even though he had commitments to meet and clients to handle. To make this clear to you, these were the same commitments and clients he was happy to deal with before he paid off his credit cards.

On inquiring further, I learned that he had made one more change to his normal operation and that was turning his entire paycheck over to his wife so she could pay money back into the IRA within a 60 day period so their withdrawal would not be counted as a taxable distribution.

What actually happened when he did this was that he put himself into an “enforced poverty” situation with no “walking-around money” or haircut money, or lunch money for entertaining clients and other people he networked with.

This “enforced poverty” actually changed his viewpoint of himself to the point where he could no longer act like the highly talented professional he was. He is extremely effective at selling his services and commanding high rates for doing so. His easy going personality and confident approach to handling serious issues normally gives him instant credibility when dealing with new clients.

When he “pauperized” himself by cutting out the simple pleasures that made his existence comfortable, he downgraded himself in his own eyes to someone who desperately needed to make deals at any price. If you have ever encountered a salesperson who was desperate to make a sale, you will know how repellent that attitude is. You just want to get away from his desperation. That shift in his viewpoint instantly affected his ability to make money.

I coached him into looking at what he needed in the way of his own discretionary income to feel comfortable about himself and his morale increased immediately. It wasn’t much, but it changed his self esteem and that was what was needed.

Each of us has some idea of what we need to feel comfortable about our current place in life. For some, it is having enough money in their pockets to buy a meal whenever they want to. For some, it is having enough money to afford traveling by cab whenever they want to. For some, it is being dressed stylishly. All of these are creature comforts by which we judge our worth in some way.

If your income is dependent on your ability to make a good impression on others, these creature comforts are essential because they bolster your self esteem and let you concentrate on doing business. If you deprive yourself of these service facilities your attention will be distracted by their lack and you will not present yourself with your normal confidence.

Maintaining one’s self image is an individual issue and the solutions will be different for everyone. The essential point to remember is that if you are to present yourself in a way to inspire confidence, you must attend to those creature comforts that you consider essential.

I have been doing personal and business consulting for many years and deliver services over Skype and Zoom for clients all over the world. If you would like me to assist you in some personal or career matter, you can contact me at srtcounseling@gmail.com

David St Lawrence

This entry was posted in Challenges to overcome, Dealing with hard times, Handy things to know, Shooting yourself in the foot. Bookmark the permalink.

One Response to Unexpected Consequences of Economizing Unwisely

  1. David says:

    After writing this article, I realized that your income is ALWAYS dependent on your ability to make a good impression on others.

    This is why when you lose your own place to live and are forced to live in a room in another person’s house, or on the street in your car, or on the street with no shelter, you suffer greatly from a lack of self confidence even though you are capable of doing the same work as when you lived like an ordinary human being.

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