Last Updated on February 9, 2021
Personal financial management involves attention to many details, which is why most of us procrastinate about taking care of business. But there is a deeper obstacle to getting ahold of your finances than just not liking to be a bean counter. That would be a lack of strongly felt reasons for doing what you do with money. I call this awareness “developing a bigger picture” because it involves becoming conscious of more than your immediate desires and worries, and thinking critically about what is worth your hard-earned cash.
This is tricky business. As I mentioned in a previous blog, the internet is loaded with advice about what you need to do succeed, be happy, be successful, not be a loser, not do things all wrong, etc. etc. On top of that, you may have pressures coming from friends, parents, employers, or even (heaven help you) internet “influencers.” Trying to harmonize all those voices is impossible. As Shakespeare (King Lear actually) says, “That way madness lies.” What I most sincerely do not want to do here is to add yet another voice to this chorus of opinions and advice.
1. Be Honest with Yourself
What I do wish to do is encourage you to actually spend some quiet moments to ask yourself what you really want going forward. If a hundred of you actually did that, there would be a hundred different answers, and that is good. The process has many different labels: being an individual, taking personal responsibility, having moral agency. It is not an easy process. You encounter confusion, make impulse purchases, change your mind, and sometimes feel lost or uncertain. But all of this is supremely worth it, because, win or lose, you get in the habit of standing for something (many somethings actually), and in doing so, you gain access to what is best in yourself.
2. Identify Your Goals
What does this look like on ground level? Maybe you are someone who has known since third grade what work you want to do. For those, the process may be relatively simple, because you just need to prioritize your actions (and your spending) to get where you want to go. For others, your goals may be more immediate like reducing your debt or increasing your savings. You may want a better apartment, a better job, more education, better relationships. Others may have even more pressing concerns, such as affording the rent, getting control of debt, finding a job, getting out of a bad work environment, and the like.
What all these very different goals have in common is that, in order to achieve them you have to be willing to give up other, more immediate desires. Want a better apartment? Maybe you can have one if you are willing to economize on other spending. Want a better job? Maybe you need to spend time researching that, instead of surfing Twitter. The small changes you make now will be worth it in the long run.
3. Make Informed Decisions
In sum, the main point here is that personal financial management is not essentially about money details at all. It is about making conscious choices rather than getting pushed around by forces inside and outside yourself that bully you into spending money for no real reason at all other than scratching some temporary itch. Make sure your purchases are worth the investment.
Having said that, not all conscious choices are created equal. But even a bad choice is almost always better than no choice at all. At least it is yours, and does not belong to some internet advertiser who has figured out how to manipulate your desires, or some “listicle” author who has convinced you to try to copy the five things that all rich people do. The great thing about bad choices is that they can be improved. You can always choose a better choice, so to speak. In a way, that is what a good life is: always seeking to make better choices. Are you making choices that bore you to death or make you miserable? That’s an opportunity to seek out ones that motivate or inspire you more. Have you made choices that leave you doubting that you have taken the right road? Again, an opportunity for reflection.
Maybe your doubting is just a passing mood, or maybe it has some insight for you. You have to decide which. Are your choices really in line with your your deepest aspirations? Get in touch with those aspirations, and see if they influence your decisions. Think of choices as rungs on a ladder. You can’t get to the better choices until you have learned from the limitations of previous choices. It’s called living a life.
4. Write it Down
After you finish reading this blog post, you will most likely completely forget it. Hey, if that is your choice, go for it. But if you want these words to mean something to your actual life, I suggest you spend some time with a pencil and paper to canvas your memory for choices made in the past, and invite your imagination to go a little wild with suggestions for possible choices to make in the future. You know the Charles Dickens novel, A Christmas Carol, where Ebenezer Scrooge gets visited by the ghosts of Christmases past, present and future? Invite your own ghosts of choices past, present and future to visit you. That may inspire some interesting thinking.
OK, philosophy class is adjourned. Future blogs will focus on much more specific challenges of financial management for renters, such as using credit cards, thinking about savings, how to establish and maintain good credit, and more. But if there is one take away from this blog, it is that none of this financial management advice will mean much in the end unless you develop a strong sense of what is worth your money.
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