There’s a lot of conversation right now about responsibility and ownership. With so many US government workers finding themselves in difficult financial situations in the recent weeks, quite the debate has surged over whether their difficulties are the result of deeper systemic issues such as wages that have failed to mark pace with the rising costs of living, or if it is more so a demonstration of an overall societal trend towards poor money management and dismal savings habits.

I think if we are all being honest with ourselves, it’s both.

As a Vancouverite in one of the highest cost of living cities in Canada, the impact of rising housing prices, food, transportation and the like is readily apparent all around us. Mike and I bought our current home only six years ago, and yet a typical middle class family would now be hard pressed to buy into the very same neighbourhood, likely having to push their budget to the extreme ends of their means. All because housing prices have doubled in that same time frame, while incomes most certainly have not.

The inequality between the rising cost of living and lackluster wage increases is very real, and it undoubtedly presents a hurdle for many people. But, at the end of the day, no matter the circumstances around all of us, or how real these economic issues may be, if we elect to lay blame at the feet of others, how does that help any of us take control for ourselves?

Yes it provides a very viable excuse where we each feel we aren’t to blame for our own circumstances, but other than saving our own pride, does it serve to change things in anyway? Or does it not only push the blame onto others, but also the expectation for ownership of action?

Relinquishing ownership is the last thing anyone should be doing if they want to improve their financial circumstances. Instead, we should be striving to demonstrate Extreme Ownership of every single financial decision, mistake and setback we encounter, regardless of our individual networths.

Extreme Ownership is a well-known book written be Leif Babin and Jocko Willink, both former Navy Seals with substantial combat experience. The authors wrote the book as a guide to what it takes to be an effective leader, even in the highest pressure, most dire of circumstances.

In the book, Willink and Babin repeat a mantra that there are no bad teams, only bad leaders. The statement highlights the importance of a leader who takes ownership of every mistake, set-back and failure their team may experience, even when on the surface the blame may appear to be attributable to the failings of others. Despite being targeted towards a leadership audience, the book has many applications to each and every one of us as individuals, particularly those of us on a journey to improve our financial circumstances.

Learning to take extreme ownership of your financial situation gives you the fundamental ability to change your circumstances. Full stop.

In the absence of extreme ownership, you fall prey to being a victim. A victim of circumstance, a victim of the system, a victim of everyone else’s failings but your own. That’s a horrible place to be, not only because of the mental toll that kind of perspective can take, but also because by taking that view, you are giving up the position that you have the ability to take action and effect real change immediately.

Now I’m not suggesting that those impacts aren’t real for many people. There are absolutely many people in difficult positions because of circumstances that truly are outside their control. But there are ALWAYS ways to take ownership of those situations and start from a position where YOU are in control of changing them, rather than placing yourself at the mercy of others action or inaction.

When it comes to Financial Freedom, or even just saving enough money to avoid living pay cheque to pay cheque, taking ownership of where you are is a crucial step to effecting that change.

If someone is broke because their cost of living is too high, it’s time to take ownership of the situation and make the necessary cuts to remedy the situation. If its housing costs, it’s time to own that your lifestyle exceeds your means. Downsize or move. If your vehicle is costing more than your wallet can handle, own that you made a poor decision in purchasing the vehicle, sell it and buy a less expensive vehicle, a bus pass or a bike.

If your employment isn’t paying the bills, it’s time to take ownership and start cutting bills. Lose the cable, lose the internet, lose the cell phone, stop using AC, get a second job, or preferably all of the above. Those things may sound extreme, but remember, we all lived without cell phones not even 15 years ago, and many of us grew up in houses with no AC and worked two or more jobs for a good portion of our lives. It’s not extreme at all – it is very doable – and yet somehow many things that were once considered luxuries have now been elevated to necessities. Our sense of entitlement has surpassed our sense of financial accountability.

No wonder the cost of living is increasing so rapidly. Not only are housing and gas prices exploding, our standards of living are increasing right along with it.  The most broke people I know all have smart phones………….and it leaves me asking why???? A smart phone is most definitely not a need, so why are they choosing the ability to play Candy Crush or update their Facebook status over their own financial stability. $50-$100+ bucks per month for a cell phone bill is a big savings for a lot of people.

Sure – we would all prefer to have these luxuries, I’d like to have my own airplane for when I travel and a personal chef to cook all my meals, but the reality is those luxuries are not financially feasible. But if we are choosing unsustainable luxuries, even small ones, over our financial security and stability for our families, then we truly are acting irresponsibly and we need to take ownership of that behaviour. We need to recognize it for what it is, and then start to ask critical questions of ourselves about how we can change it and where we can save.

The same is true for people who have found themselves stalled on the path to Financial Freedom. If you think it’s your spouses spending that’s sabotaging the plan, own it. Maybe you didn’t communicate the plan clearly enough. If it’s not having time to secure a second source of income, own it, stop watching TV and make it happen. If its poor investment returns, own that you made bad investment decisions, or made a poor choice in selecting an investment advisor. Don’t blame it on your spouse, your business, your financial advisor, or the stock market. Whatever it is, own it. Then fix it.

Now, in no way am I suggesting that all the circumstances that lead people into difficult financial circumstances are the result of poor money management or irresponsible spending, that’s most definitely not the case. But taking extreme ownership of our life situations, regardless of how or why each of us got to where we are, is absolutely the solution to changing our circumstances for the better.

If you want to explore the idea of extreme ownership further – check out Jocko Willink’s TedX talk here, or borrow Jocko and Leif’s  book from your local library. For those readers with kids, Jocko also has a fantastic book embodying the concept of extreme ownership but written for kids, the book is called Way of the Warrior Kid. Our 9 year old read it last year, and the impact was very much noticeable. I highly recommend it to those not only teaching their kids about financial self-discipline, but ownership of their actions in any scenario.

Extreme ownership is uncomfortable, it challenges your pride and ego at every turn, and can leave all of us experiencing the unpleasant feelings of shame and vulnerability, but it provides each of us with a starting point to take stock of where things have gone wrong or can be improved, and take the necessary action to initiate effective change. From there – like all good investments – the results simply compound.