Where Is Your Financial Locus of Control?

Locus of Control - not to be fooled with a Locust of Control

No, no – not a locust. A LOCUS.

I’ve been thinking a lot lately about how our demeanor and attitude influence our finances and overall sculpt our lives. It’s fascinating to me that people with similar upbringings and backgrounds can end up in such different places. Equally fascinating is how people with totally different backgrounds can find similar levels of success.

Part of what I really like to read about and listen to are the success stories of people who were in a bad spot financially. Typically it’s folks with a lot of debt. It’s a story many of us can relate to. Perhaps it was student loan debt, or credit card debt. Maybe it was some combination of both, with a car loan added to the mix.

Whatever the circumstances, there seems to be one common thread among nearly every story I read. In most cases, people ended up with an internal locus of control when it comes to managing their money.

What Is a Locus of Control

If you’re unfamiliar with the term, don’t feel bad. The term locus of control refers to the degree to which you believe the outcomes in your life are determined by your decisions.

People with a strong external locus of control generally believe that they have somewhat little control of the events of their life.

Those with an internal locus of control generally believe that they have a lot of control of the events in their life.

Motivation and Your Locus of Control

It’s interesting to me that in most of the success stories you read about, people tend to shift from a passive lifestyle – one that has a very strong external locus of control – to an ‘oh crap’ moment.

These are the moments when people realize that life’s been happening to them, and they’ve just been around for the ride.

This kind of makes sense. There’s some sort of trigger that happens in their lives, and they realize they need to make a change. When that happens is different for everyone. Some people never actually reach that point. Others don’t need to because they’ve been following a great path all along.

But most of us will stumble at one point or another and some sort of trigger will say to us “Hey! You need to change what you’re doing!

That motivation – whether internal or external – is critical. Without it, even someone with a strong internal locus of control may find themselves aimless. Motivation and this sense of ownership of your own future create a powerful combination. Looking at not only the financial success stories, but also any sort of truly successful entrepreneur, and it all seems to point at this.

How My Locus of Control Shifted

My financial and career loci of control weren’t always internalized. It’s actually a relatively new development that I have taken some real ownership over my career. I’d grown lax on managing my money as well.


Several years ago at a previous job, I was content to work from home. My boss was 2000 miles away, and my workload was light. After going through a few weeks of asking for more engaging work, I still hadn’t gotten anything exciting.

Instead of taking any sort of initiative to find a new job or seek out work on my own, I became lazy.

Overall I knew this was bad for my career – but I was content with just getting a paycheck and hanging out at home.

My career locus of control – how I felt about my ability to succeed in my career – was extremely external. If nobody was going to give me work, there was no way I could succeed.

Then out of the (relative) blue, a good friend sent me a text saying she was going to hire me. I shrugged it off, but after a few days of back and forth realized she was serious. My work ethic had sucked, but I was given a lucky break to change.

Shortly after I started and got back into the rhythm of actually working I started to internalize my career locus of control. I was responsible for what’d happen from here on out in my career.


Up until early this year, Kristin and I were pretty lax in our money management. We both make decent money, and we were able to save pretty aggressively for our wedding. A concrete budget though? Not something we did. With cash flowing in and us living comfortably below our means, we felt pretty good about our situation.

We weren’t living on just a single income – in part because our money was still separate – and we were exposed to some risk, but things felt pretty secure.

Of course, then I got laid off. That was my trigger – my ‘oh crap’ moment – when I realized we needed to do a better job of managing our money. We had a lot on the line, and we’d grown comfortable and lazy. Our wedding was coming up, and our house was scheduled to start construction in a very short time.

When I got laid off we had a long look at our expenses. Some things we cut – and meal prepping, which coincidentally was at the same time – helped us keep our food costs down.

Over the course of the remainder of 2017 we took on other initiatives to start our marriage off on solid footing. All of the things we did were totally in our control, even though the trigger – the motivation – came externally.

Balancing Loci

Here’s the thing about all of this. Even if you have a strong internal locus of control and believe you’re in charge of everything, the truth is that life happens.

Shit’s going to blow up. It’s going to go wrong at some point. No matter how much effort you put in to prevent something from happening, bad things will happen.

Internal and External represent two ends of a spectrum; most of life happens somewhere in the middle.

Most of us probably fall along different parts of the spectrum based on which facet of life we’re talking about. I am definitely more internally-aligned when it comes to career and finances – I feel confident that I’m the biggest influence over my success (or failure) in my career.

When it comes to politics, however, I’m definitely more of a passive observer. I have an external locus of control and am impacted by things that are out of my control, despite being able to vote and voice my opinion.

Find Your Locus of Control

Knowing how you feel about things is important. Emotional intelligence and the ability to understand yourself is extremely helpful to advance in your career.

When you read success stories, what’s your reaction? Do you try to find the nuggets you can take out of the stories? Are you inspired and motivated by them?

Or do you brush them off as unrealistic, not applicable, or maybe even flat out lies? Are they mostly luck, or are they mostly the result of hard work?

If you’re like me, there’s probably a bit of it all. The general slant in how you answer  these questions may point to your personal financial locus of control.

Knowing where you stand is important, just as it’s important to know what motivates you. As my locus of control shifted from being primarily external to being primarily internal, I took more control of my life. I’ve been on a happier, healthier, more productive path.

Maybe it’s just coincidence. Or maybe there’s something to it.


Time to try something new! Please vote on the poll below. There are four options relating to where you consider your financial locus of control. I’m very curious if people consider themselves successful or unsuccessful financially, and what sort of attitude they have toward their finances..

Where would you consider your financial locus of control to lie?

View Results

Loading ... Loading ...

I’d considered making this my ‘question’ at the end, but wanted to keep this data semi-anonymous. So here’s a bonus question…


Do you think that having a strong internal locus of control is important for success?

You may also like


  1. Good post. I try to focus on what I can control and do. Many things are beyond me (sort of), like my salary, other income, stock market, who’s in charge of the government, etc. But I can decide how to spend the money, and how to live my life. It’s always a learning process to figure out and focus on what matters to me the most.

    1. Even some of those things you can influence though. Salary is a good example – sure someone else may be the one cutting the checks but you’ve got the power to do whatever you want to do to raise (or lower) your income. All it takes is the appropriate work!

      Sometimes that work isn’t worth it (ie I could be making a ton of money as a doctor…but then i’d have to study/go to school to be a doctor. Is that worth it?) but it’s still relatively in your control. And there’s virtually unlimited upside if you start your business. There will be outside influences of course but you still are in power to influence it!

  2. Great post Dave! I like the comment about taking nuggets out of stories. I think the reason this financial blogging community is so tight and “with it” is even though there’s a lot of us, we welcome more because more writers means more stories which means more ‘nuggets’ that you can find. Everyone has a unique story and there are many nuggets to be found!

    1. Yeah for sure! Everyone’s got a unique spin on things. Some things will click with folks; others won’t.

      But the more broad the message, the better likelihood there is of a message applying to somebody.

Leave a Reply

Your email address will not be published. Required fields are marked *