What are your financial blind spots?
I think I’m reasonably self aware, so it came as a surprise when my wife, Mika, recently told me that I needed to work on my grocery store etiquette. Who knew there even was such a thing? I’m just trying to hunt and gather and get outta there.
Yet, after Mika explained it to me, it made perfect sense. There’s a flow to the grocery store, and my myopic fixation on the handful of items I was commissioned to collect occasionally resulted in an interruption to that flow, or worse yet, a reversal to it.
And while habits ingrained over decades can be tough to reroute, I think it’s safe to say that I’m reformed—or, at least, reforming. If nothing else, I’m a willing student. Thanks to the awareness, I’m less of a hazard to other shoppers, and when I err, I’m starting to catch myself.
You see, the thing about blind spots is that we can’t see them.
That’s what makes them so tricky—and often costly, especially when dealing with money.
What’s Your Financial Blind Spot?
For example, maybe your blind spot is overconfidence, a blind spot especially common in men that is pretty well explained in our general unwillingness to ask for directions (when that was a thing).
Or perhaps you’re an emotional spender. Whether to celebrate, soothe, or escape, it doesn’t take much to act on the three most dangerous words in cash flow management: “I deserve it.”
A particularly interesting blind spot is avoidance—ignoring the evidence of financial mismanagement (like not reading scary credit card statements) or being unwilling to have a hard money conversation with a spouse, partner, parent, or child.
Undervaluing time is an interesting blind spot, the domain of the die-hard do-it-yourselfer. Is it really worth an entire Saturday to save a couple bucks?
Chronic comparison is an endemic blind spot that has practically become a collective concern thanks to social media. It has a close cousin in image-driven spending, too, when we prioritize others’ opinions of our purchases over our own financial well-being.
False frugality is an interesting blind spot, when we get stuck on micromanaging ourselves—or more harmfully, others—by fixating on smaller pet purchases than the bigger-ticket items (like mortgages, car payments, outdated estate plans, club dues, and other stacked subscriptions) that have more of an impact.
One of the most common blind spots—rooted in our psyche for millennia—is the short-term bias, explained by the phenomenon of hyperbolic discounting, suggesting that we have a very strong preference for that which could enhance our survival today over deferring for an unknown future.
Meanwhile, over-saving and under-living gets a lot less attention than its inverse, but it’s an especially common and damaging blind spot for many who have, at some point in their lives, experienced serious financial hardship.
But here’s the problem: We don’t know what we don’t know, so how do we spot blind spots we can’t see?
5 Ways To See Our Blind Spots
1. Ask someone you trust. Your spouse, a trusted friend, a parent or mentor, your financial advisor—someone who isn’t afraid to speak the truth in kindness, not as a critique, but as a mirror. This is a good place to start in revealing financial blind spots.
2. Review your transactions. We used to say, “Show me your checkbook, and I’ll tell you what’s important to you,” but this is a much easier task today with the advent of online banking and budgeting tools that will auto-categorize all of your transactions. I’ll warn you that can be a starkly illuminating exercise, but by removing judgement and approaching it with curiosity, it becomes a revealing reflection.
3. Pay attention to tension. Our blind spots may live in patterns that we feel that haven’t been named yet, so where do you notice financial friction? That may just be rooted in a blind spot. And for bonus points, what bothers you in others? Eckhart Tolle said, “Anything that you resent and strongly react to in another is also in you,” so, as hard as it is to admit it, acknowledging what annoys us in others often reveals our own blind spots.
4. Tell your personal money story. My wife and I recently did this live and on camera—and good news: Our marriage survived it. In fact, we learned things about the other that we never knew, and it led to insights that are as practical as they are interesting. But you don’t need anyone else to engage in an exercise of self-discovery. Start by answering the question, ideally in writing, “What is your first money memory?” Then, proceed to walk through each of the major financial memories that shaped your youth and young adulthood. What you’ll often find is that your financial strengths and weaknesses today are directly tied to this story.
5. Reflect without should-ing or shaming. We have a tendency to should all over ourselves (and others). But turning this exercise into a shame fest, we risk missing the point and the opportunity. In fact, if the identification of your financial blind spots leads to self-flagellation, it could well backfire on you. If you’ve made financial mistakes, I have good news for you: So has everyone else. This is because money management is as much an exercise in mistake management as anything else.
What I hope you’ll find, instead, is that by making the unconscious or subconscious conscious, now you’re empowered to do something about it. Financial planning is powerless to remedy an unknown illness. And if much has been revealed as you’ve walked through this exercise, my encouragement would be to document all of it and work on just one blind spot at a time.
While we may never eliminate all our blind spots, we can shrink them—with intention, reflection, and a little help from the ones walking the aisles of life with us.
