Common Personal Finance Issues:

Posted on July 22, 2008. Filed under: -- Building Wealth, -- Money Help (in simple terms), -- Saving Money And YOU | Tags: |

By Molly Malone

Since I’ve been studying  money as a subject for years now, I’ve noticed that there are some common personal issues amongst us out there, and thought I’d categorize them for you. Since I see numbers as black and white and don’t really attach emotion to them, many people talk with me about their finances. You would be surprised though at how many people take in a lot of money, yet have no assets to show for it.  Instead, they continuously are buying depreciating assets, which are digging many of them into big, DEEP ruts.

— Overspender: Don’t forget it’s not what you make, it’s what you keep. I tell teachers all of the time that they can be rich because it’s what they keep.  The problem is that many people spend more than they take in each month.  Chronic overspending can be a serious problem, and if you are a serious spender, I do recommend seeking help. I had a friend who was a shop aholic. She still loves to shop, but after she got counseling, she now can control what she spends.

— Procrastination: People tend to put things like saving off for a rainy day, but the problem with that thought is that saving is much more effective if you start earlier than later, even if you just put away an extra $5 month! Seriously. Get yourself in the savings habit. If you’ve got some extra cash in the bank earning savings account rates, and you are procrastinating due to lack of financial intelligence, do something about it. Shoot me an email at and we can talk about options, or try someone local to you.

–Unpreparedness: I talk about the importance to have an emergency cushion, which I think should be at least 6 months worth of expenses should you not be able to work, but it seems many can not fathom the idea. This unpreparedness leads to unpleasant surprise, ultimately leading to overspending and debt.

— Lack of Education and Thinking You Can’t: This one drives me nuts. Lack of financial education is a good reason not to get into investments that you don’t know about, but you really need to become your own CEO. Nobody will ever care about your money as much as you will, and it is time for the learning to begin.  Start paying attention to the financial part of the world and news and you’ll be surprised how quickly things come together. In the mean time, I’d get some financial advising so you can start buying yourself some paper assets.  Or, if you’re like me, you could enroll in real estate classes to start investing in real estate. It’s whatever your comfortable with, but do get started (only after your emergency fund is solid though).

— Using emotion not reason: Crazy.  People listen to the news to get information on the economy. When times are “tough” the reporters talk about it to no end, and it’s plastered all over the news. They even run like crazy. Some lose sleep!  However, those same reporters often forget to also mention that on the flip side of when people think times are “tough,” things are actually GREAT for others. People that have the financial education recognize this type of economy to make money, realizing “America’s on sale” and they are buying left and right. Notice how I said people that have the financial education, instead of saying “those that are rich” are buying. Money is cheap today, and it’s time to take action. You don’t have to be rich, you just have to be smart.  

— Financial Clashes– So your friends spend ALL of their money and buy things like Kate Spade purses. At the end of the month, and underneath their glam, they are broke. Broke at the bank, and broken hearted. You instead, have enough purses and have a $300 cashflow at the end of the month.  You know, however, that that cashflow would be more like +$1400 per month if you and your friend did things differently. So, it’s time for you to take control of your financial future and start putting that extra cashflow to work for you.  You might have to change the way you hang with your friend in order to achieve your goals.  Not STOP hanging out, just get some new hobbies together like walking, biking, singing, etc. 

And what if you are a saver and your spouse is a spender? Well, this happened to me, but fortunately I was able to empower my boyfriend with all of these numbers explaining the importance of keeping some of the money you make. Now he’s quitting his job to travel around and hang out since he stayed disciplined and consistent. I did the same thing.  Took about 6 months off or so with no worries. Chilled and traveled.  Anyway, if this isn’t the case, you must work together to build a financial plan that keeps both of your goals in mind, and uses each persons strengths to carry it out.

One Response to “Common Personal Finance Issues:”

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So have you bought that Austin investment property yet? Might be a good idea to get it done now, while the numbers still make sense!

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