Times have been tough for many families for the past six years – or since the housing market meltdown of 2007. This is why so many people are now paying much closer attention to their personal finances. If you are a member of this group, you may come across some truths that you simply don’t want to accept. The reason for this is because it means taking more responsibility and making the hard decisions you would just as soon leave to others.
The six nasty truths
- You can’t have everything you would like to have
- Financial institutions are not your friends
- No one will teach you about personal finances
- You may be your own worst enemy
- You need to stop watching TV
- Personal finance isn’t tough
You can’t have everything you would like to have
Just about every third commercial on TV will tell you that you can “have it all.” It’s like your parents probably told you that you could be anything you wanted to be. Unfortunately, neither of these is true. If you’re 5’6″ tall and not very well coordinated, you will never be a professional basketball player. Similarly, you can’t have everything you want. If you want to stay out of debt – which is a very good thing – you will need to make some very hard choices in terms of how you spend your money. You will either have to give up some things you want or max out your credit cards and spend years as a slave to your debts. You may not be happy to read this, but the sooner you understand this the better.
Financial institutions are not your friends
The credit card companies and even investment firms are there for one reason and one reason only – to make money off of you. Despite what they might tell you, they really don’t have your best interests at heart and will charge you any fee they think they can get away with. For example, your bank may add what it calls ” courtesy overdraft protection” to your account, which can cost you hundreds of dollars. If you have a fixed-rate credit card, don’t be surprised if you get the mail one day and learn that your interest rate has changed. You must constantly look out for your own best interests and not let those financial institutions nickel and dime you to death.
No one will teach you about personal finances
If this were the best of all possible worlds, our schools would teach us about personal finances. But most schools don’t. For that matter, even your parents might not have told you much about handling your finances. This means that if you’re like most people you will need to learn the basics of money management yourself. A good first step would be to go to your public library and check out a few good books. Some of the best of these are, The Total Money Makeover by Dave Ramsey, Smart and Simple Finances for Busy People by Jane Bryant Quinn or The Wealthy Barber by David Chilton. If you don’t read some of these books and make a concentrated effort to learn more about personal finance, you will learn by trial and error, which can be a very expensive way to learn.
You may be your own worst enemy
If you find yourself deeply in debt or your finances simply aren’t what you wished they were, you can’t blame some outside source. Look in a mirror. The person staring back at you is the person who was responsible for your problems. You need to accept what you’ve done and then do what’s necessary to get your personal finances back into order. This includes getting your credit score, creating a budget and then identifying those areas where you could cut your spending and save money. If you try to blame your troubles on others this will just prevent you from doing the things you need to do to get your finances under control.
You need to stop watching TV
Did you know that watching TV could cost you and your family $1 million over the course of your lifetime? You need to either stop watching TV or cut down on the time you and your family spend watching it to reduce the amount of influence that TV has on you. The easiest way to do this is to simply limit the amount of TV you watch each week. That way, you will be watching only the shows that are important to you and not just sitting in front of the TV lazily. When you understand your financial goals, those enticing TV ads will not have as much of an impact on you and your spending.
You may want to blame your money troubles on how difficult it is to manage personal finances but that excuse just won’t fly. For that matter, you probably already know everything you need to know to be successful at managing your personal finances. In fact, the answer is very simple. You just need to spend less than you earn. You could understand this even if you were just a child. In many respects it’s the same as weight loss. You know that if you want to lose weight you need to consume fewer calories. And you undoubtedly know in your heart of hearts that what you need to do in order to get your finances under control. It’s an inconvenient truth but you just must spend less than you earn. Of course, that’s the hard part. But it’s one you need to practice if you ever want to get control of your finances.
One good way to get control of your finances is if you were able to pay off your mortgage in seven years as this would free up money you could use to pay off other debts or save for retirement. Does this sound kind of impossible? Then watch this video to learn how you could actually do this.