Plain and simple, we do not learn enough about personal finance in our school systems. The only thing I gained from my high school business class was a reminder of how to balance a checkbook. However, society has told me for years that instant gratification is the right thing, especially with credit cards and car loans. Thousands of television commercials have told me this. “You deserve that vacation! Put it on your credit card, relax, and worry about it later”
How could we have allowed advertisements and media be the main source of financial education? Fortunately, we now have endless accessible information on the internet, so you don’t have to wait to get started learning how to improve your financial situation and set yourself up for a better future.
Your personal life is your own business/company, and you need to treat it like one. Every business must be financially sound to be successful, and you are no different. Money is a means to creating a better life. No, money does not necessarily make a person happy. But money does open up doors and provides opportunities that may lead to happiness. You want to quit your unfulfilling job to work on a new and exciting project but will need to take a 25% pay cut? Your financial situation could destroy any shot at making this work. If you have enough debt (credit cards, car loan, mortgage, etc.) and very little money to your name, it may be impossible to take a pay cut. On the other hand, if you have no debt, a sufficient emergency fund, and have invested heavily in your retirement already, taking on meaningful work with a pay cut is a no brainer.
Just like losing weight, being financially healthy is more behavioral than technical. There are many financial tools everyone should know how to use, but they are not complicated. Roth IRAs, mutual funds, HSAs, 401ks…they all sound very complicated. But they’re not. And I will explain them in simple terms in this blog.
The real challenge is the behavioral part. This takes discipline. To set a budget and analyze your monthly expenses. To receive a payraise and not go buy that 60” that you’ve just dreamed about for 3 days. It takes discipline to avoid instant gratification. But really, it’s not that hard. You can do it. This is coming from someone who used to be the ultimate spender, spending every single dollar I made (on video games and live sports events).
You simply need to align your spending with your goals. Look at your life and decide what really matters to you. What is your purpose? And what is needed to be done so you can spend your life energy on your purpose?
If you’re like me, you may not know exactly what is your purpose. There is no problem with that! But why not get started on the financial part now so we can make something epic happen in the future!