Posted by Lending Club :: November 13, 2008 @ 6:31 am

"It's the same thing every month. I always have a perfect budget, and I know exactly how much I can spend each week. But somehow, it never works out. I suddenly check my purse and there is no money left. I find myself at the ATM time and time again. Why can't I stop spending?"

I'm sure you've had this feeling before while dealing with your finances: a feeling of helplessness, where you don't understand where your money is going. However, the difficulty of continued frugality lies in two factors.

1. Internal Factors - Internal factors are those that make you need to spend, such as habits and wants. Purchasing Starbucks every day and a desire for a new iPod are examples of internal factors.
2. External Factors - External factors are temptations and expenses caused by the world around you. Think of emergency expenses, mortgage payments, and the most insidious factor of all: social pressure.

Why is it so hard to create the habit of frugality? Because there are two sides pulling you in to spend more: yourself, and your circumstances. Can you feel embarrassed about being frugal? Trent over at TheSimpleDollar says he doesn't, but I disagree: what about when you are at dinner with friends and the bill comes out to more than you expect? If you act frugal and try to scrimp on the tip, or try to pay for just what you ordered, without a doubt you will feel a little embarrassed.

To develop the frugality habit, you must combat both the internal and external factors, simultaneously. If you can find the solution to these factors, you will be able to finally develop that habit. In the next couple of posts, I'll write about how to solve each class of factor.

Until then, think to yourself: "What are the reasons that I can't save money?" Once you know the answer to that question, you will know the next step to follow to meet your financial goals.