Updated: Aug 1, 2019
I listened to a caller to the Dave Ramsey show not long ago, and part of the woman’s financial trouble was the large mortgage payment and mortgage debt that she had, and her difficulty selling the house for what she owed. When Dave asked her why she bought that home to begin with, her answer was “I had no choice. Rents are so high in this area that it was cheaper to buy than rent.” This buy vs. rent scenario is one I’ve heard from my own clients far too often, and my response is always similar to Dave’s:
“Why did you have no choice? Did someone put a gun to your head?”
It’s human nature to try and justify our bad decisions and financial mistakes. I think it’s our way of avoiding what I consider the worst emotion we ever experience: regret. Nothing is worse than regret over a past decision, not even grief at losing a loved one. Regret comes attached to many types of decisions, not just financial. But that nagging feeling that we could have (“woulda coulda shoulda”) done something to bring about a different outcome is just the worst.
Just to put this particular scenario to rest, it would have been much better to rent than buy, given the factors of income, budget, existing debt, lack of an emergency fund and down payment, uncertainty about the future, all of which figured into this woman’s problem.
We always teach to get out of debt and build an emergency fund of 3 to 6 month’s of expenses, and save a good down payment, before buying a home. Otherwise, the home becomes a curse instead of a blessing, and greatly increases the chances of foreclosure or bankruptcy in the future. The costs of home ownership go far beyond just a comparison of rent to mortgage payment. This woman’s story, and many others like hers, proves the point.
But...that’s not the point I most want you to take away from reading this.
My point is that you ALWAYS have a choice, unless someone literally is holding a gun to your head. You may not have been AWARE of your choices when you acted, but not knowing your choices is not the same as not having choices.
The proper response to Dave’s question should have been: “At the time, I thought I had no other choice. I realize now that I was mistaken and ill-informed.” The difference is in NOT clinging to the “I had no choice” mantra now that it’s too late to prevent the mistake. It might help you feel a little better, and avoid some feeling of regret, but it hinders you from making better decisions in the future.
You’re more likely to say “I have no choice” in the future, if you still insist “I had no choice” in the past. It becomes a habit.
You have to acknowledge your bad decisions, and forgive yourself for them, before you can change the way you make decisions in the future. If you let your pride get in the way of acknowledging your mistakes, either to yourself or to others, you will always find a way to blame other people, the economy, a political party or politician, or just plain “bad luck” for the circumstances you find yourself in.
You will never succeed in life until you take responsibility for the past, forgive yourself, learn from your mistakes, and decide to be the captain of your own destiny.
So how can you avoid the “I have no choice” trap? By admitting 2 things.
1. You may not know all your choices.
So find out. There are always more than 2 choices. If you can only identify 2, keep looking for at least one more. Humble yourself and find people who have gone through something similar and succeeded, and ask them a LOT of questions. And look for consistent answers from more than one successful person.
If you don’t identify more than 2 choices, you risk adopting a fatalistic attitude, such as...
“It’s either go into $100,000 of student loan debt, or work a minimum wage job for the rest of my life.”
“It’s either spend $50,000 on a wedding, or never get married at all.”
“It’s either buy this house I can’t afford, or live in my car.”
Anytime someone reduces things to 2 choices, you can bet they are 2 diametrically opposite, and very extreme, choices. And they are just setting up to try and justify what they want by claiming “I have no choice”.
2. You may not like your choices.
Well, guess what, there’s gonna be something you don’t like in any choice you make, most likely. It’s just a question of which things you are willing to admit out loud.
If you are unwilling to consider anything but one choice, it’s because you are ignoring or denying the bad consequences of that one, while over-emphasizing the bad parts of the other possibilities.
The solution is to compare your preferences for now to your consequences in the future.
Which decision will be better for me in 5 years? 10 years? That’s how to choose. You almost certainly will have to put up with things you don’t like in the short term, in order to achieve a much better long term outcome.
Regret comes not from short-term inconveniences, but from long-term, often irreversible, consequences. Identify those consequences of each of your (greater than 2) choices, and weigh them very carefully. Downplay or ignore the short term inconveniences. That way you’ll experience far less regret in the future. Schedule a FREE consultation to discuss your money problems. Let's make a plan.