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Locus Pocus

If you have something happen to you, do you blame it on yourself, or blame it on external causes?

It’s an odd question, but an interesting one as it deals with your personal locus of control. But, that’s jumping ahead. Let’s start with defining a locus of control.

In psychology, the locus of control is a scale that defines a person’s beliefs about what causes good or bad results in their life. For example, you might know someone who always blames themselves when things go wrong, or someone who credits only good or bad luck for what happens to them. People like these define either end of the spectrum on the locus of control. People who blame themselves for everything in their lives have an internal locus. People who blame higher powers, luck, or the environment for occurrences have an external locus of control.

Now, it’s worthwhile repeating that this is a scale, not an either-or proposition. People can display different characteristics of either locus for different issues. The big question we’ll ask here though is: What is your locus of control with money?

When you can’t run out of cash, is it because you had bad luck and needed to spend more than you had thought? Or is it because you forgot to plan ahead and have an emergency fund? Knowing your locus of control with regard to money can help you to plan in ways that work with your financial psychology as opposed to against it. And a plan that you can work with is a plan you’re more likely to follow.

Don’t let your psychological beliefs get in the way of you being financially successful. A good financial plan can help to protect you against both internally and externally caused problems.

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One Response to “Locus Pocus”

  1. Ivan says:


    This is a fine article. I always ‘strugle’ for control in my mind – to blame on bad luck or blame on my bad habit?

    Like you mentioned, planning ahead can actually help your mind to ‘expect’ a pattern.


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