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The Principle That Can Make You Rich or Keep You Broke

Speeding Through TunnelImagine you’re in the final stretch of a grueling race, vying for first with a small pack of determined opponents. As adrenaline and your desire to win pushes you forward, one by one, you pass your competitors. Finally, with the finish line in sight, you’re in the lead. Of course, you won’t relax and give others a chance to catch up; you will push through to the finish with every last drop of energy in your tank. The reason? Inertia. For every inch you gain, your mind propels your body two inches further. You’re in motion, and you want to stay in motion. You have momentum.

I’m no psychologist, but I have realized that personal inertia can be a powerful force in life. The human mind needn’t obey laws of physics, yet in many ways, it does. Our propensity to stay in motion can help us win races, earn promotions and yes, reach our financial goals. Unfortunately, inertia can also keep us at rest; the same principle that helps us achieve positive goals can make it increasingly difficult to escape bad habits.

Inertia In My Financial Past

I was financially reckless for most of my early twenties. I spent too much and earned too little. Worse, I didn’t realize at the time just how big a hole I was digging for myself, nor how difficult it would be to escape. One of the reasons I lived that way for so long is because the deeper into debt I got, the easier it was to spend even more and pile even more zeros onto what I owed. I had momentum for sure, but in the wrong direction.

If you have ever been “maxed out”, you know this feeling. You get to a point where you can only afford minimum payments, which don’t make a dent your debt and leave you needing to turn to credit again just to keep the lights on and food in the fridge. And you can certainly forget about saving! That’s why the first steps towards positive financial change are the hardest. You have to break the inertia. You have to force a body at rest to become a body in motion. The good news is that once you take that first step, lasting financial change becomes easier every day.

Five years ago, when I wanted to spend money, I didn’t think “I can’t afford this”, I thought “what this costs is insignificant to what I already owe…it’s just a drop in the bucket, so why not?” Today, however, I have a totally different relationship with money. For one, money I spend is actually money I have…not credit. That makes a huge difference. For me, it’s far more difficult to part with hard-earned cash. What’s more, I’m progressing faster towards my financial goals with every month. And the faster my debts dwindle and my savings grow, the more I’m motivated to save.

How to Use Inertia to Reach Your Financial Goals

I want to outline three things that helped me overcome the inertia that kept me broke and in debt and then harness the inertia that has been propelling me to meet my financial goals. Regardless of where you’re at in life, I hope that you can put these three tactics to work in your own life.

#1: Break Bad Financial Habits

If you are in a cycle of debt, not saving or simply spending too much, you need to quit the bad habits that are causing the problem. Often times, this requires a big life change like changing where you live, getting a second job (or a higher-paying job) or at the very least giving up luxuries that you have come to enjoy. Just like quitting smoking or losing weight, making such a big change is difficult, and inertia will make it even harder. So once you decide to break your bad money habits, act intensely. Rip the band-aid off. Do not try, just do.

#2: Set Goals and Keep Yourself Motivated

Step one, reversing the direction of your finances, is the most difficult step because it requires the most energy and commitment. Now, at least you have stopped yourself from rolling the wrong way. But getting going in the right direction isn’t going to be easy, either. This is the stage where it will be important to set small, achievable goals and to keep yourself motivated by reading books and blogs. Whether you are digging out of debt or starting to save, it’s easy to get frustrated by how slowly things go in the beginning. If you want to save $25,000 and only have $1,000 in the bank, you’re probably going to see a long road ahead of you. To help, break your big goal into smaller chunks. Figure out when you can save $2,500 and pat yourself on the back when you get there for saving 10 percent of your goal.

#3: Track Your Progress

The farther along towards your financial goals you move, the more motivated you’ll become to reach them. That’s inertia at work! Of course, you won’t enjoy this boost of motivation unless you can visualize just how far you’ve come. That’s why it’s so important to track your progress. It doesn’t matter whether you use a spreadsheet or just a piece of paper taped to your bureau. Remind yourself daily of the obstacles you have overcome and you’ll become inspired to make even bigger strides towards your goals.

What About You? Has inertia played a role in your financial story? Have you felt trapped in a cycle of bad financial decisions, or have you started working towards financial goals and found that you picked up a momentum that motivated you more and more?

Photo: bass_nroll

Published or updated on March 26, 2010

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About David Weliver

David Weliver is the founding editor of Money Under 30. He's a cited authority on personal finance and the unique money issues we face during our first two decades as adults. He lives in Maine with his wife and two children.


We invite readers to respond with questions or comments. Comments may be held for moderation and will be published according to our comment policy. Comments are the opinions of their authors; they do not represent the views or opinions of Money Under 30.

  1. Matt says:

    I like this post. I have just managed to turn around to start running forwards rather than backwards.
    A quick history into me. I have only 3k (GBP) worth of debt and my girlfriend has around 15k of debt. We both went through a moment a couple of months ago where we had approximately £20.00 till next pay day which was half a month away.
    We then decided to change. 2 months in and I am £500.00 better off in my overdraft and it is growing every month. She is better off too. I am beginning to get excited about this and blogs like this really help.
    Good motivator.

    • Matt says:

      I forgot to mention the 60k mortgage in that too ;P
      but that was the same payments as rent to it makes things a bit more manageable than most people’s as we went from renting to payments with no difference in cash.
      My goal is to save to approximately £20,000 in 5 years.

  2. Christina says:

    These are really great pointers, I’ve been through this, I’m not yet broke, I’m not rich either…But I think I really need to do something about my financial stability, I need to cut bad financial habits and stop using band aid. 😀 thanks for sharing.

  3. FX Coach says:

    Some people refer to this as “being in a rut”. Things and activities which have become a cycle becomes bad behavior, whether financially or otherwise.

    But for a person to successfully get out of that cycle, if he truly wants to achieve something that he hasn’t achieved yet in his life, then he must be willing to try and do things he hasn’t done yet in his life. There is no point in hoping more successful results by doing the same things which were unsuccessful in your first tries over and over again.

    Btw, nice blog you have here.

  4. Mike says:

    You forgot rule #4. Delay having kids if you can. They are the biggest savings buster. I’m saving enough so I can afford to have a kid.

  5. MikeB says:

    You mention reading books and blogs in order to further your financial education; I agree.
    With all the information available to us why don’t more people use it?
    I think that the pain of debt has to get to a point where it hurts more than does “ripping off the band-aid”, as you say, before someone reverses the grip of inertia.

  6. Tom says:

    I was in the same situation last year. I was using credit cards for everything from clothes to food to school books because I simply did not have the money. I knew I had to make a change, all my cards were maxed and I could barely afford to put gas in my car. So I started taking on odd jobs and side work to pay the bills and it worked but wasn’t sustainable. That’s when I demanded a raise at work or I was leaving for a better paying job. Luckily, they gave me exactly what I wanted. After that, I finally made a budget. This was my first step in the right direction. After that I looked at my budget every day and started looking at where my expenses were highest. I set out to find ways to cut my monthly expenses, beginning with paying off my credit card balances to eliminate the payment as part of my expenses. I used my tax return to pay off almost all my debt. By this point I really started gaining momentum and looked for more ways I could save money every month. I bought a more fuel efficient car, I found a cheaper insurance company, I ate out less during the week and bought groceries, even made changes to my cell phone plan to lower the bill. It’s a great feeling to be in the black every month and be able to save. I also used a lot of tips from this site. I really like this post because it’s true that once you get going and build up that momentum you just keep going. I can now actually enjoy spending money because everything is budgeted and accounted for. Before I would blindly make purchases with credit cards and that all started when I was 18. I’m now 21 and almost completely debt free and am saving money every month in the bank. My long term goal is to save a down payment for a house and I also want to have one year’s salary in the bank before I’m 30.

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