Advice about personal finance is logical enough. Do this, don’t do that, and things will follow a certain course. The trouble is that, in between the advice and the finance, there is a person.
Some of the advice about finance makes certain assumptions which don’t apply to everybody, for example:
- Your income and expenditure are more or less predictable. Increasingly people live in a world where there is no assurance of a job for life, or even long term. This makes it hard to budget for today and to plan for tomorrow. Living with an unpredictable future can make financial plans seem like wishful thinking.
- Choices are easy to make. We all know how bewildering the supermarket aisles can be. How much worse is it when decisions about pensions and loans are really important and can cost thousands? Today’s online financial world is very confusing for those who do not deal with it every day.
Live for Today?
It pays to understand your own inbuilt attitude to life and money.
If you are the sort of person who believes in letting tomorrow take care of itself, you may be inclined to spend and to borrow too readily. You set your heart on a Chrysler 200 or a vacation in Honolulu, so you snap up the first personal loan that comes along, without checking the small print. If circumstances change, the tide of debt can roll in very quickly.
Hold back a little on those decisions that can commit you for too long and push you near to the edge of what you can realistically pay. Think a little bit more about the future and what might happen.
Plan for Tomorrow?
The future is so uncertain that it can be worrying. Some people spend so much energy planning for what lies beyond the horizon that they neglect the opportunities to make the most of the here and now. They also tend to be the people who agonise about investing their money and regret their decisions later.
Putting money aside is sensible, but be realistic about how much you will really need. You don’t have to cover every possible scenario, only the most likely or most serious.
Easy Come, Easy Go?
If you are the sort of person who adapts easily to changes in circumstances, you are very fortunate. But even if you do not get into unmanageable debt, you can still find yourself later in life struggling to get by on a meagre income, or never amassing enough money to do some of the things on your bucket list.
Preserve your healthy attitude to finance, but shift towards saving for both your long-term future and your short-term ambitions.
Make Your Plan
Knowing what sort of financial person you are can help when it comes to managing your finances. Money is meant to be a means to the end of making the best of life both now and in the future. Use it for your own goals, nobody else’s.