To put in in layman terms, personal finance is everything you do in your life that has something to do with the ins and outs of money. If we sum it up that way, it probably encompasses everything, except digging your nose. From choosing the number of channels to subscribe on cable, to buying the best tasting creamiest milk in the supermarket, to leaving a portion of your salary in your savings account. How well you manage your personal finances will affect your lifestyle, your self-esteem, and even your relationship with others.
Because somehow our society have conditioned us to accept that money is power, we often unknowingly fall into the social mindset of wanting to own the biggest houses on a prime district, drive a fancy car that accelerates faster than our friends, and also ask for good looking job titles as titles can reflect an employee’s income. So early in our lives that we get exposed to these material mentality that we can even observe kids preferring clothing and accessories that are branded.
In fact, when we look at celebrities and successful people around us, it is difficult to determine whether these public figures are admired for their abilities or for the money they make. Many people will not admit that money is the most important thing in life. Sure things like health and relationships are important too. But no matter how important they are, they are at most, just as important as money. Never beyond. You won’t be able to afford healthcare without money. And you won’t be able to grab dinner with your partner without cash in your wallet as well.
With embedded idea of the importance of money in our life, personal finance can seem like a crucial subject to ignore indeed unless you are one of those lucky ones who is sitting on a huge inheritance. The overall concept is to set financial goals and draw up plans to reach those objectives. Strict discipline will then have to be implemented so that actions will be followed through. It is a means to an end. The ultimate goal is financial freedom.
How well you manage your finances can either cause great happiness or miserable sadness. Have you heard of stories where people get divorced because their partners have gone bankrupt or have accumulated a huge amount of debt? And when you hear couples talk about the happy things they do, it usually implies that they had to spent money to do them. Things like travelling, playing golf, or just having fine dining.
It is a strange world where kids dream about being a policeman, wrestler, or even a soldier at a very young age. But they are never taught about the principles of financial management properly in school. Even universities have courses and modules on banking, accounting, stock markets, etc. But no one ever needs to attend compulsory courses on personal finances. Maybe because at the academic level, students are trained to be workers instead of getting free of the rat race at a young age? Because if we look at it this way, the sooner someone becomes financially independent, the sooner he leaves the workforce. And lesser people employers can hire staff.
Remember that as a responsible adult, it is your responsibility to get your finances in order. It is never too late. Drop the happy-go-lucky attitude and grow up. Money management is really a key skill to master for your own sake and for your family’s sake. It can sound daunting to some people. But you will find it very basic stuff once you get accustomed to it.