money health weekly


Ending Financial Self-Sabotage

financial self-sabotage

❝Our brains haven't received an operating system update in 150,000 years.❞ -Ted Klontz

I stroll out of bed on January 1st, 2001, after a late night at a New Year's Eve party. I'm slightly hungover, but I'm excited because it's now the first of the year. The start of every new year is when I start to anxiously await my W2 from work. As soon as I get my W2, I can file my taxes. I've heard that many people seem to dislike filing taxes, and I can't understand it. Filing taxes, to me, means that a large check is coming. Every year it's the same. I fill out my tax form, send it in, and wait for my refund check.

As soon as my check arrives, I start thinking about ways to spend my newfound windfall. This isn't actually true; I start thinking about ways I can spend this money long before my check arrives. I love getting a big fat chunk of money all at one time. In previous years, I've used this to buy stereo equipment for my apartment, car stereo equipment, furniture for my apartment, and weekend getaways. Arguably, most of the purchases I use my tax refund on are things that are outside of my means. Somebody working as a part-time fry cook doesn't necessarily need to have thousands of dollars worth of home theater equipment in an apartment. This year, I have my heart set on a new computer. There are these things called laptop computers that are pretty expensive, but they've come down in price a little bit in recent years.

A short time later, I'm required to get an internship for my drafting program at technical school. I live in Moorhead, Minnesota, and I find a job in Moorhead's sister city across the river of Fargo, North Dakota. It's at a small ten-person company whose employees are all North Dakota residents. They aren't equipped to work with a Minnesota guy. My limited understanding of the matter is that I shouldn't be paying North Dakota taxes, therefore no North Dakota taxes should be coming out of my check. Instead, I should be paying into Minnesota. Because they don't know how to deal with me, I end up in some kind of loophole. Except for Social Security and Medicare, my checks don't have any taxes taken out of them. This is a fascinating opportunity for me, I think. Instead of lending my money to the government for no interest, only to get it back after I file my taxes, I can save this money, earn interest, and then pay my bill when it comes due and pocket the interest.

Except it doesn't end up working that way. I do a good job of saving what should be my withholdings for a couple of months, but it doesn't take long before the entire check gets absorbed by my day-to-day spending. Come tax time, I have a gigantic tax bill that I don't have any money to pay for.

It didn't matter whether or not taxes were taken out of my check. If taxes were taken out of my check, I wasted my money after getting a tax refund. If taxes weren't taken out of my check, I spent the money I wouldn't otherwise have, thereby wasting it. In both cases, I chose temporary satisfaction over my long-term wellbeing. In both cases, I financially sabotaged myself.

seeking temporary satisfaction instead of long-term wellbeing