The mismanagement of personal finances is an epidemic in the United States. Debt levels are high, and savings levels are low. Everyday, millions of individuals go to work feeling the strain caused by bad financial decisions. And as much as they would like to leave the strain behind, they can’t. It is hard, if not impossible, to compartmentalize the impact of unpaid bills or living paycheck-to-paycheck.
Those in leadership roles are no different. The impact of mismanaged personal finances follows them to work. And because of it, their leadership suffers. Here are four ways mismanaged personal finances creates poor leaders:
1. Mismanagement of personal finances creates a stressed leader.
The weight of financial turmoil is heavy. You feel it. Your family feels it. And your team feels it. It constantly seems like you are on the verge of either a total meltdown or explosion. As a leader, you become short with your team. Your patience is minimalized. You become a leader everyone wants to avoid.
2. Mismanagement of personal finances creates a distracted leader.
When bills are beginning to pile up and the majority of your payments go to cover the high interest rates of credit cards, it becomes difficult not to think about it. You want to give your full attention to your team, but your mind constantly shifts to your looming financial disaster. You are in the meeting room, but your thoughts are elsewhere. Your decision-making takes a significant hit as you can’t seem to think clearly.
3. Mismanagement of personal finances creates a leader who is more focused on their paycheck than their organization.
You start showing up to work because you find out more debt is pilling up and need the money instead of showing up because you have a passion to lead. And it begins to show. Your focus changes. You no longer talk about what you can do for the organization, but what it can do for you. You feel like the organization owes you something, preferably more money. You start to develop resentment toward the organization. And it is difficult to lead an organization you resent.
4. Mismanagement of personal finances creates a leader who is tempted to steal from their organization.
A struggling financial picture and a belief that the organization owes you something is a bad combination. It becomes easy to justify the use of organizational funds for personal expenses. After all, they have plenty of money, and it is just a lunch. So you steal. You become the type of person and the type of leader that you never thought you would be.
The Bible tells us that we are to be good stewards of our finances. We are to manage our money well. The consequences of financial mismanagement are significant. They do not remain compartmentalized, but seep into almost every aspect of our lives. For leaders, this includes the ability to lead. Leaders should manage their personal finances with the same scrutiny, effort, and care that they do their team. Because poor personal financial management will create a poor leader.