Greek tragedy was a popular form of drama performed in theaters across ancient Greece. These plays were usually commissioned for competition during religious and other types of festivals, and many were re-performed and copied into scripts for ‘mass’ publication. Although each differed slightly, the plays had similar themes – a dramatic setting that deals with a serious or somber theme, typically involving a person destined to experience downfall or utter destruction, as through a character flaw.
They say that art imitates life. Well, it certainly seems to be doing so in Greece nowadays.
Greece has given us the Olympic Games, new ideas in science, art, philosophy and also Alexander the Great. It was also the birthplace of Western civilization, modern democracy as we know it.
But now Greece is imploding financially.
Unemployment is over 25%. The country has the highest debt-to-GDP ratio in Europe and four out of ten children in Greece are living in abject poverty.
There’s plenty of blame being thrown around. Some have blamed the euro. Others have blamed Greek politics. Even others have pointed to Greece’s chronic tax evasion and corruption as the source for the current crisis.
But that’s just poking around the real problem.
You see, Greece joined the Eurozone in 2001 and immediately started borrowing money. For the next 7 years, it ran big deficits and added more and more debt. Most of the funds were used on public spending, with the government’s expenses growing by 87% compared to a 31% increase in income from taxes during the same period.
When the tide goes out, you get to see who has been swimming naked.
When the global financial crisis of 2008 hit, Greece’s credit rating was cut to the lowest level possible. The Greek government found it impossible to get new loans and debt swelled like the stomach of a competitor in a hot dog eating contest. In a nutshell, the reasons for Greek’s financial turmoil are:
Spending more than they earned
Failure to take control of their finances
What’s interesting about this list, is that the problems mentioned above are the very same problems that get ordinary people into financial trouble. Although the common currency, politics and corruption certainly may have contributed to Greece’s issues, the real problem with Greece has to do with not following basic personal finance principles.
You see, the Greek people and their leadership have committed basic money mistakes and you can learn something from these mistakes when it comes to your personal finances:
Mistake #1. Not taking responsibility. The Greeks borrowed money from outside agencies to bail them out of the aftermath of the 2008 economic crisis. Instead of taking ownership of their actions, they are now complaining that the terms, to which they agreed to, are too hard. They are blaming everyone else including the very lenders from which the sought money from! Imagine what your credit card company would say if you purchased a lot of items at a high interest rate and when the bill comes in, you say “But I don’t want to pay the high interest rate on my purchases.”
Know this: It’s easier to run away from financial problems than it is to face them. It’s easier to cop-out of money issues than it is to own them. It’s easier to find someone or something to blame for your money worries than it is to accept blame. However, a person that doesn’t take responsibility for their money problems is destined to repeat them. It is no coincidence that five years after the previous bailout of Greece (also the biggest bailout of a debtor in history) that Greece is again needing another bailout. History repeats itself until something changes.
The lesson is inside the consequences
I realize that nobody likes pain and it’s painful to take “financial medicine”, but if you’ve had a hand in digging the financial hole you’re in you need to take the medicine. Here’s why: Because the lesson is inside the consequences. I see too many people go to great lengths to avoid the tiniest bit of pain from their money mistakes, when that’s exactly what is needed to finally inoculate themselves from the toxic money habits they have.
One of the most pervasive myths in our culture today is that everyone is entitled to a great life — that somehow, somewhere, someone is responsible for filling their lives with continual happiness. But the real truth is that there is only one person responsible for the quality of the life you live. That person is you. If you want to be successful, you have to take 100% responsibility for everything that you experience in your life, good and bad. This includes the level of your achievements, the results you produce, the quality of your relationships, your income, your debts, your feelings — everything! Have you ever blamed anyone or anything for your current circumstances? If so, that means you didn’t take 100% responsibility for your life. To achieve major success in life — to achieve those things that are most important to you — you must assume 100% responsibility for your life. Nothing less will do.
Mistake #2. Being in denial. In the very worst part of the crisis, the Greeks somehow thought it a good use of their time to craft a referendum about the austerity measures being imposed upon them and then promptly voted “no” to a definite plan for the future, without a clear alternative. This reminds me of that trope about rearranging the deck chairs on the Titanic.
Ignoring money problems doesn’t make them go away, it just makes them more expensive
When facing financial death, people will go to any lengths to delay and distract attention away from the inevitable. Know this: Ignoring money problems doesn’t make them go away, it just makes them more expensive. More than a quarter of Americans say they feel stressed about money most or all of the time. Only 30 percent rate their financial security as high (8, 9 or 10 on a 10 point scale where 1 is not at all financially secure. People commonly deal with anxiety by avoiding whatever it is that makes them anxious. Unfortunately, if you avoid dealing with your finances, you’ll likely create more financial problems, and more anxiety, in the long term. Money matters are too important to avoid. If you’re struggling with financial avoidance or financial denial, you can take action to get your money matters back on track today. Start tracking your income and spending. Develop a spending plan that puts your spending below your income. Use tools and make it easy on yourself by using automated saving programs as much as possible. Don’t deny money problems and let them fester. Take them head-on and change your financial destiny today.
Mistake #3. Choosing instant gratification over a secure future. Unfortunately, the Greeks have a history of acting against their own self-interest, both individually and collectively. By action and inaction they’ve adopted the pathology of instant gratification. Instant gratification is a habit where you forgo short-term pain that will eventually lead to long-term pleasure, and instead indulge in short-term pleasure that eventually leads to long-term pain. In other words, you find reasons (excuses) not to do something because of the pain it creates in the moment even though you know that this action is necessary to help you attain your long-term goals and objectives.
People who act without a sense of how yesterday has affected today are unlikely to have a strong sense of how today affects tomorrow
Getting caught up within the instant gratification trap can make you very susceptible to addictions, jealousy, anger and impulsive behavior. It also often leads to higher levels of stress, anxiety and overwhelm in the long-term (does this sound like Greece today?). In fact, indulging in instant gratification indicates a lack of self-discipline and that a person is unable to control their emotional urges. This has significant consequences on their life — resulting in narrow minded thinking, poor decision-making and planning habits. People who act without a sense of how yesterday has affected today are unlikely to have a strong sense of how today affects tomorrow. Know this: When it comes to money, the piper will get paid sooner or later. As Jim Rohn used to say “Everyone will experience one of two regrets in life, the pain of discipline or the pain of regret.”
If you are not where you need to be financially, take a look at your spending habits. If you fall prey to instant gratification, start building the habit of delayed gratification. The act of delaying gratification helps to strengthen your mind and shape your character, it builds your willpower, promotes higher levels of self-discipline, and teaches you about the value of patience. It is in fact the ultimate habit that determines how successful you will become and how much you will ultimately achieve in the future.
The Greek government ran into trouble essentially by living beyond its means. On a personal level, there are many who take the same risks everyday. With no money set aside for the future, should some unexpected event occur, they are placed in financial turmoil.
The ability to save money, once considered normal, has become rare, and many people live from paycheck to paycheck, and if they do save, it is to buy a specific consumer item (big screen TV, new car, clothing…) or to take an expensive vacation. There’s nothing wrong with enjoying life, but to get ahead in life you must take control of your finances.
Learn a lesson from Greece on a personal basis. Don’t spend more than you earn, and make sure you save a portion of your paycheck for the future – and leave it there to grow. Leave the tragedies to the movies and take the necessary steps today to secure your future and become financially free.
Be free. Nothing else is worth it.
Don’t let your personal financial habits create a tragedy in your life. Change the ending to the movie with these other financial freedom articles from the blog’s archive: