Money management for many, usually the lack of it, is taboo territory, and most will refuse to talk about it. Personal finance is an area which casts confusion where disclosure is vaulted away, and kept secret, this in a world of increasing transparency.
There are just a select few who has their financial affairs in order, having account for where every penny they own is stationed, while most struggle. The degree of financial management ranges from not being organized, to chronic outlandish spending, to debt.
Talking about one’s finances, how much money they have in the bank, what their overall net worth is, their investments, is avoided like the plague. The reason being disorder, not managing their money properly. There are steps however that one can take.
A Lack Of Financial Knowledge
What’s not taught in detail is financial literacy in school, such as how Math or English is taught. So unless your father was a banker, or had parents who helped you understand the aspects of money and financial management, most are left in the dark.
What we as a society learns better is by being entertained rather than being educated. If you don’t understand the values of risk management, budgeting, cash flow, planning for retirement, cost planning, estate and tax planning, then the odds are you’re querying the wrong sources.
The Mystique Of The Financial World
What Wall Street casts is an aura of presenting itself in a cloak of mystique, a vagueness, this when operating their secret black box weaving their magic.
So because of our overly busy lives, that leaves little time for anything other than basic operational management of our money, such as paying our bills on time, collecting information to do our taxes, insurance renewals, mortgage payments, then saving or investing what’s left over.
When was the last time you asked how you can build a broader portfolio so you could make better informed decisions. Try reserving at least a few hours per week educating yourself, helping to better understand the financial world.
The Ignorance Of Knowledge
Our ego steps in the way, as most will never admit, “I don’t know,” this especially regarding the state of their money.
What we do instead is compete. We show off how successful we are against our friends, family, neighbors, and colleagues.
This is our measurement of success, that we live in the better neighborhood, a bigger house, drive a more expensive car, and take the more luxurious vacations.
Our ego also prompts us to spend more on things we shouldn’t, just to show off, just to show the world how successful we are.
Most spend money that they don’t have, creating the beast that is debt, this when trying to make an impression on others, who most likely don’t care.
Avoidance Of Money Issues
We learn as kids if we burn our fingers on a hot stove element, we’ll avoid doing so the next time, even though we didn’t understand why. This is the same when it comes to money.
What money creates is anxiety, confusion, and pain for many, reasons we don’t understand, usually dragging out memories from our childhood.
This especially if we grew up in a household where money was scarce and the center of conflict, so just the mere mention of it creates a queasy feeling in our stomach.
We react this way because we’re programmed to do so from our past experiences. Handling money or talking about it is our own personal “caution” zone.
Too Much Information
The Internet age presents too much financial information, all mostly conflicting each other, so you have no idea who to believe. Late night sales pitches, commercials, the predictions of financial doom.
You’ve seen the sales pages on the Internet from the Wall Street gurus proclaiming “You can trust us,” while you read a story about the same firm being sued millions for deceiving the public.
So who should you believe. Not researching all the facts, just because an advertisement, your cousin, or someone from the gym recommends a financial plan, is poor planning.
Instead of learning from past experiences, there’s a certain ignorance which exists that things will turn out, or there’s plenty of time to resolve the financial issues.
This leaving fate to be your director, an arrogance that nothing can happen to you, that whatever happens will happen.
If you’re attitude is that since your parents worked everyday of their lives and lived until they were 95, that you don’t need to worry as you’ll do the same.
This is delusion if you refuse to save for your retirement, this because you know you’ll inherit your parents money anyways. What you’re suffering from is the arrogance of fate.
Proper Perspective On Spending
Become more objective, this when it comes to everything that’s important to you, thinking things will always work out in your favor. Focus on this objectivity especially regarding your finances.
If you enjoy golfing, the membership cost of the country club becomes a necessary expenditure, while your spouse who loves to travel, thinks that the golf fees are a waste of money, while the vacations is better money spent.
He thinks that her manicures, massages, or chronic shopping is a waste of money. Being objective becomes difficult since each value things in the world, that others don’t always agree with.
The Anxiety Of Finances
One of the biggest anxieties in life, rich or poor, is our money and how we choose to handle, spend, and save it.
So it becomes important to shift our focus by mindfully thinking more about it on a daily basis, and not ignoring the fear of it. Take action which is in your best interest.