Math. Like many people, for some unknown reason I grew up with fear and loathing of mathematics. It was always my worse subject in school. Just mention words like “hypotenuse” and “calculus” and my eyes still glaze over. So it’s no wonder that dealing with my finances raises my anxiety level. I am thankful that calculators are now ubiquitous and I don’t have to deal with anything more complex for my personal economics than addition, subtraction, multiplication, and division. And thank goodness they put the unit price on items at the grocery store. Otherwise I’d be stuck there for hours in a sweat trying to figure out whether the 12 oz size really is the better buy.
It’s all in black and white or red. Shakira’s hips don’t lie, and neither do the numbers. Unless you are talking about statistics (which are subject to various interpretations), there is no hiding from the facts. Your expenses either exceed your income, or they don’t. The numbers don’t lie; they are what they are. You can’t kid yourself.
It’s work. Most of us have some sort of system for dealing with our finances. It may be simply allocating cash among actual paper envelopes for expenses. Or using some whiz bang software that practically tells you when it’s time to do the laundry and how much detergent to use. Whatever you do, it does involve some actual work.
I know, some people actually love tracking the pennies and comparing their expenses for the past ten years and projecting percentages forward for the rest of their lives. But many others do just the minimal amount required to balance the checkbook. OK, some people have no system at all other than hide-your-head-in-the-sand-and-hope-it-all-works out, which requires no work at all.
Somebody is always in better financial shape than you. I don’t mean that someone earns more money or has a higher net worth. But no matter how good you are at handling your finances, there will always be someone who makes you look bad. These Jones may even have less income than you, but they manage to save more and they have less debt. Don’t you just hate them?
All the best laid plans No matter how organized you are and think you have all the bases covered, life often has a way of tossing curve balls your way. Nobody anticipates losing a job, getting into a car accident, getting divorced, or having a sudden death in the family that has a financial impact. So you can have all the designated emergency funds you want, but there’s certainly no guarantee you’ll be fully covered when that unexpected event hits.
It’s the economy, stupid. Sometimes no matter how hard you try, you keep getting knocked down. What is it with gas prices in the summer? I know, I know, it’s supply and demand and politics and there’s a war on and all, but my office is still the same distance from my house. I didn’t get a raise but it’s costing me more to get there.
It’s a touchy subject. People have difficulty talking about money. It’s no news that the topic can cause tension in relationships. We don’t talk to our friends and we don’t talk to our significant others. Why is it so taboo? We are a product of our economic upbringing, so money hits very close to home. Some people are doomed to make the same mistakes their parents made; others are determined to live differently.
Thinking about your finances can cause anxiety and depression. OK, I’m no Dr. Phil, but money is a hot button for many people as discussed in #7. Most people are not living it up on Easy Street. They have very real fears about how to make the ends meet now, and how they will handle the future. It can be very overwhelming.
There are too many questions to answer. We are faced with endless financial decisions to make every day, large and small. Should I buy it? Is the larger size more economical? I deserve it, don’t I? Is the market is going to fall, so should I sell now? Or should I hang on a little longer? Do I want greater security or the prospect of a greater return? Is that shirt going to be marked down, or should I buy it now? Should we save for the kids’ education, or for our retirement? Can I afford it? How am I going to pay my bills this month? Should I just put it on the credit card? Can I get it cheaper somewhere else? Is it worth it to go somewhere else to get it a bit cheaper? What is my time worth?
There are no cookie-cutter answers. There are very few absolutes in personal money management, other than “spend less than you earn” and “buy low, sell high.” Each individual’s or family’s situation is unique. This can be very frustrating for people who want to know what the “right” thing to do is.
Take a step back, and review your economic goals. Do you want to get out of debt? Save for a house? Aggressively fund your retirement? Break the big goals into smaller steps. Then figure out how to achieve those interim steps. There is never going to be only one answer or method. Talk to others, read everything you can, and give it a go. The one thing I don’t hate about finances is that there usually is some flexibility and choice of approach. I can make changes today, and sometimes without having to deal with too much math.