Dave Ramsey says that “finances is 20% head knowledge and 80% behavior.”

The reality is that most of us know more than we apply. For instance, don’t spend more than you have; yet studies indicate that we regularly do just that and consequently we have debt.

Anyhow, I’ve been reading Suze Orman’s book, “Action Plan (New Rules for New Times)” while on vacation.

She references a study that confirms Ramsey’s adage:

“A recent study by the Federal Reserve of Boston concluded that 40-50% of modified loans end up delinquent again within six months.”

Essentially a loan is modified in an effort to lower monthly mortgage payments (a service brought to you courtesy of the Home Affordable Modification Program… an initiative of the federal government).

This study reveals that even with lower monthly payments, within six months people are in trouble again. Essentially the loan modification proved to be a band-aid to the symptom. The real problem is a behavioral one, otherwise the modified loan would have fixed the problem of almost 1 of 2 program participants.

The issue is not a knowledge deficit, it is a behavior problem.

The truth is that until we get our behavior under control we will continue to have financial problems.

If you are struggling financially the first place to look is in the mirror.

Chances are that if you change your behavior you will see a change in your finances. So, what do you need to stop/start first?