“When I read your description of the Bermuda Triangle of Finances, I stopped…and then I cried. It was absolutely 100% what’s going on for me.”
This was what my newest client shared as she openly and honestly talked about her relationship with money. She had each of the 3 classic symptoms that come with the “triangle” that keep my clients drowning and fearful instead swimming in the abundant life of their dreams.
So what is the Bermuda Triangle of Finances, exactly? Well, let’s start with remembering what the Bermuda Triangle itself is (as defined by Wikipedia):
“The Bermuda Triangle, also known as the Devil’s Triangle, is a loosely defined region in the western part of the North Atlantic Ocean, where a number of aircraft and ships are said to have disappeared under mysterious circumstances.”
When I first read this definition the word “disappeared” caught my attention. Because that’s what my clients feel like when they’re spinning in the triangle trying to keep their heads above water, often times without a financial plan of any kind. Thinking that they’re the only ones that don’t understand money and their finances, they feel guilty and ashamed and choose to hide below the radar instead.
And it can all be avoided if you understand the 3 points of the Bermuda Triangle of Finances and how they work together to have you experience that you’re drowning and spinning.
Point #1 – Not consciously using your money – In today’s society, we’re constantly bombarded by TV commercials and other advertising mediums that demand our attention to buy, buy, and buy some more! And as I always like to say, if you haven’t taken the time to decide how to use your money in your life then money will ended up being used to buy just about anything and often random things that don’t really matter to you. At that point, there’s a lack of consciousness about how you’re using money in your life that has money slip through your fingers when having a solid financial plan could instead support you to build a strong financial foundation.
Point #2 – Having a decent amount of consumer debt – Most of my clients, on average, have between $25,000-$50,000 of consumer debt. This debt is held either on credit cards or as a home equity balance (i.e. they transferred higher interest credit cards to a lower interest home equity line), and it was typically generated by living above and beyond their means (expenses exceeded income) for a certain period of time. Very often, there is not a strategy in place to pay off the debt, and the person is left trying to pay off debt for past expenses while they’re continuing to spend more than they make…and the debt increases even as they’re doing their best to pay it down.
Point #3 – Limited savings – For me, this is the critical shift in stopping someone from drowning in the Bermuda Triangle of Finances. Without any savings (or limited savings), life’s surprises with financial consequences will typically end up on a credit card (see Point #2 above). With savings, life’s surprises can be absorbed and cash can be used instead of debt. It may seem counterintuitive, however it’s critical to have savings and even be actively saving while you’re paying down debt. Many experts recommend using all extra cash flow to solely pay down debt, and in my experience it’s best to have a financial plan to divide extra cash flow toward both debt and savings to strengthen your financial foundation.
When people experience these 3 things, the feeling is frustrating…like your lack of a solid financial plan will just keep you in the same old downward spiral that you’ve always been in.
And I can honestly tell you that it doesn’t need to be this way. I invite you to take a stand for yourself and your life, and decide today to consciously design a financial plan that will support your goals.
Drowning in the Bermuda Triangle of Finances isn’t necessary. Are you ready to grab your lifeboat and use the tools available to support the life of your dreams?