by Dianne Webster, CFP

Do you feel “in charge” of your financial life? Or do you feel like you are being swept along by a set of personal and financial circumstances that are beyond your control? Do you take responsibility for making your own financial decisions, or do you acquiesce to the plans and opinions of others? Does fear, denial, or complacency keep you from taking a proactive approach in your money matters?

The person who should be in charge of your financial life is YOU! The degree of power you feel you have in shaping your financial life is both objective and subjective in nature, and is determined, in part, by your sense of locus of control.

Locus of control is a psychological term that describes the belief system of individuals concerning the primary point of control in their lives. Those who believe the primary point of control is outside of themselves have an “external locus of control.”

These individuals feel that outside forces (such as luck or fate), institutions (e.g., “the government”), or other individuals (viewed as “powerful”) have greater control over the direction of their lives than they themselves do. Consciously or subconsciously, those with an external locus of control believe that they are victims of their circumstances and bystanders to the course of events that surround them. In other words, they don’t believe they can have much impact on outcomes in their own lives.

On the other hand, individuals who believe the primary control of their lives is within themselves are described as having an “internal locus of control.” They feel they can influence the course of events that surround them and the outcomes of their own lives.

Because they have a strong sense of personal power, they tend not to give in to trials and tribulations and instead are proactive in making the “right things” happen for themselves. Individuals that possess an internal locus of control are more likely to “see” how they themselves have shaped their own financial life and understand how they can affect and improve their own sense of financial well-being.

In all areas of your life, look for evidence that indicates whether you possess an external or internal locus of control. If you want positive change to take place you will need to be open to the truth about yourself.

Keep in mind that successful completion of one step towards a financial goal will give you the confidence to move on to the next step. Continually remind yourself that if there is any aspect of your financial life that is unsuccessful or unsatisfying, you have the power to bring about change.

As you become more aware of your own personal power and potential, you will mentally shift to an ever-stronger internal locus of control. Along with this change will come a greater sense of personal responsibility in all areas of life. This is the attitude, “if it is to be, it’s up to me.”

© 2005 Money Quotient, Inc.

Dianne Webster, CFP®, works with clients to create a vibrant life that balances health, relationships, and financial well-being for their future retirement years. She is President of Integrated Financial Strategies, Amesbury, MA. Securities offered through Commonwealth Financial Network, Member NASD, SIPC. For more information please visit http://ifslegacy.com.

So many people who begin working with me talk about financial struggles. It's a hot topic. This thoughtful article addresses some of the issues surrounding this topic. Many times we are not taking personal responsibility for our decisions. We can get stuck in our habits and believe that is the only way life can be. Last week we talked about the power of compound interest. This week look at where you can make a difference in your financial life. Begin to feel the "internal locus of control" and take one action that puts you in control.

October 1, 2005
Rodman Ride for Kids

For the past 10 years, I have ridden 50 miles on a bicycle for the Rodman Ride for Kids rodmanrideforkids.org which benefits children at risk in Massachusetts. This year I will be unable to ride as I am still rehabbing from my broken ankle, but I am still supporting the event through fundraising. I have committed my fundraising efforts to benefit The Home for Little Wanderers www.thehome.org

E-mail me if you would like to make a donation, to participate, or to receive a brochure on the event. You can also make an on-line donation at Rodman Ride for Kids. If you mail a donation to the Ride for Kids, please put my name in the memo section of the check.

Coach Andrea's Coaching Tip of the Week is brought to you by Andrea Novakowski, Master Certified Coach who provides Business and Personal Coaching to Corporations, Businesses, and Individuals. Andrea is a professional coach who partners with people to set goals and create momentum to produce effective results in their business and/or personal lives.

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