Caught in a Money Trap? Keep Reading.

According to a well-known proverb, “Insanity is doing the same thing in the same way and expecting a different outcome.” Same goes for financial matters. After all, there’s something a little crazy about falling into the same money traps over and over again (and expecting that, one day, things will work out).

From self-sabotaging spending habits to slacking on your retirement fund, you may be caught in a money trap – without even realizing it. That’s the really tricky thing about money traps: They’re incredibly difficult to spot because they’re all in our heads. Our misguided beliefs and behaviors about spending, saving, and debt can lead to a less-than-healthy relationship with money. Not sure if you’re stuck in a money trap? Read on to see if any of these common money-trap behaviors apply to you:

• Letting someone else handle your money. When it comes to personal finance, it’s easy to hand the reins over to a spouse, family member, or even your financial planner. But, it’s risky. If you’re not taking an active role in your own finances, you have no idea what your money is doing. Completely handing your money over to somebody else – even if he/she has the best intentions – isn’t the answer.

• Keeping up with the Joneses. You don’t want to be the only one on the block without a shiny, new gas-guzzling monster SUV. And you absolutely must renovate the kitchen and upgrade all of your appliances to stainless steel – all of your neighbors did. Playing catch-up with your friends (and racking up mountains of debt in the process) can be one of the deadliest money traps of them all.

• Ignoring your money completely. Unfortunately, ignoring your bills and debt will not make them go away. If you’re overwhelmed by your monthly credit card statement or frightened by the thought of sitting down and writing out a budget, it might seem all too easy to just ignore your finances altogether and keep spending. In reality, however, your bills still have to be paid, and procrastinating won’t make things any easier in the long run.

• Pleading ignorance. A lot of folks out there really believe that financial matters are way over their heads. Admittedly, money can be overwhelming sometimes, but it’s not as difficult to understand as you may think. Whether it’s setting a family budget or paying down your debt, you don’t have to be a CPA to make smart money choices.

If you’re like most people, you probably see a little of yourself in at least one of these money-trap behaviors. But, whatever money trap you’re stuck in, there’s a way out – it all starts with changing your behavior. Once you’ve identified your money trap, you can start working your way out of it. Here’s how:

• Take control and get involved. If you’ve been letting someone else handle all of your finances (or if you’ve been simply ignoring your money problems), it’s time to step up and take more interest in your money. From your basic household income to monthly expenses, investments, and debt (if any), your first step out of a money trap is to know exactly what you’re dealing with.

• Own up to your money issues. Sure, it would be nice to blame your parents, your spouse or partner, or the economy for your money woes, but the truth is, it’s your money. And, if you’re stuck in a money trap, nobody’s going to get you out of it but – surprise – you. If you really want to change your money habits, you need to stop blaming other people.

• Review your spending habits. Before you can get a grip on your finances, you have to know what you’re doing with your money every month. Sit down with your monthly bills and bank statements and look for patterns. Are you blowing $100 a week on lunch when you could be brown-bagging it? Do you pay your credit card bill and immediately rack up more debt? Could you be funneling more money into your savings account?

• Set a goal and write a budget. Maybe you want to pay off your credit card once and for all. Perhaps you’re trying to set a few thousand dollars aside in an emergency fund. Whatever your financial goal, you’ll have an easier time if you write a budget – and stick to it. Writing a budget doesn’t have to be overly complicated – you’ll need to figure out how much money you’ll need each month for your expenses and bills, how much you need for “extras” (like entertainment or an occasional dinner out), and how much you can save. And remember, you can always make little adjustments if you need to. After all, a budget is only helpful if you can stick to it.

And, most importantly:

• Don’t get frustrated. You didn’t get stuck in a money trap overnight, and, unfortunately, you won’t get un-stuck overnight, either. Changing your financial situation takes time – whether you’re paying off your credit card or building your savings account – so don’t give up. It’s important to remember that change takes time, and every small thing you do is bringing you one step closer to financial freedom.