What part of the financial world has the most potential to derail a person’s personal finances? Is it political or economical? No . . . I believe that the greatest threat to a person’s financial happiness and well-being is the threat of Ego.

What is Ego? According to Eckhart Tolle, the ego is the habitual and compulsive thought processes that go through everybody's mind continuously. Left unchecked, this constant ego monologue prevents us from focusing on the present moment, and instead we are caught up in worrying about what happens next. Or what we want to buy next.

Money is often the perceived stumbling block that prevents our Ego from being totally satisfied with our present reality (not that it ever would be satisfied!). The Ego wants things in your life to happen a certain way, and a specific image to be presented. The Ego believes that if you get the right things, position and status, you’ll be happy. It maps out a perfect script for you to follow for the perfect life.

It’s easy to buy into; bigger home = more happiness. OR, buy the “right” clothes, get the “right” haircut; people will see me a certain way and that will bring me more opportunities to get what I want. It might simply be, “My day goes better if I start with Starbucks.” Everything requires money to achieve, and if you don’t have money to burn, you make yourself miserable because you can’t afford what you think you want. Or you take financial risks, thinking “If I just had X, then I’d be happy.” The problem is, you THINK those things will make you happy, but nothing can make you truly happy until you completely understand who you are.

I recently watched (part of) Bride Wars, and I can think of nothing more Ego-driven than the quest to create the perfect wedding day. Do spending thousands on flowers, a dress, catering, et al, REALLY make the joining of two lives more meaningful? I hear many bridges say, they dreamed of this day since they were young girls . . . so the fulfillment of that dream, their Ego reasons, will make them happy, and any compromise will make them unhappy. Weddings aren’t only stressful to plan because of logistics, they are also stressful because if things don’t happen a certain way, people become unhinged.

You can tell that your Ego is present in situations when you feel yourself becoming stressed, defensive, outraged, offended and angry (although some people turn their anger inward and become depressed). You find yourself saying or thinking:

Why did this happen to ME?
What have I done to deserve this?
How dare they _____________?
How will I ever attain X, now that this has happened?

Allowing your ego to take over will never bring you closer to financial happiness or acceptance of financial mistakes. The Ego relies on you feeling like the donkey with the carrot attached to the stick just a little bit ahead of him . . . just when you think you’ve ALMOST made it, the damn carrot stays just out of reach. The Ego forces you to focus on the way things should be, and leaves you constantly dissatisfied with current conditions. Financial happiness depends on your ability to disregard the goals of the Ego and stay present in the moment. Rather than obsessing on how things are supposed to go, you instead accept that events are unfolding as they are (and can unfold no other way except how they are unfolding), and use that as your starting point.

From a law of attraction standpoint, letting go of the “should” in your life also allows you to focus on the essence of what you want, instead of the form. This is also very Buddha-esque, in that he believed that the origin of suffering is attachment to transient things which not only include the physical objects that surround us, but also ideas. Abraham Hicks says you can have the ESSENCE of anything you want, but it rarely comes in the form you expect or want . . . but if you allow it, the result is better than you could have ever imagined.

The moment you become aware of and acknowledge your Ego, the less power it has over you. I often notice it “leaking” when I am driving; if I am getting frustrated with other drivers, I know that I am buying into the way things “should be” instead of accepting “what is.” When this happens, I take a close look at all of the areas of my life to see where I am letting my Ego create expectations for me.

There is no specific object or thing, position or status that you need to help define who you are in this world, or that in and of itself will help you achieve financial happiness. The moment you let go of that, the REAL you is freed to explore a life uniquely suited to you, and better—definitely more affordable--than you could have ever imagined.

Author's Bio: 

Mindy Crary (MBA, CFP® practitioner and financial coach at Creative Money) helps you become a lot more educated (never inundated) about not just your money — but the whackjob behind it. Go to www.CreativeMoney.biz and sign up for free classes and more valuable money tips.