A recent study found that 66% of people named money, to some capacity, as the thing that most scared them; more than crime, snakes, spiders, and even death! And yes, even if sometimes we wish we thought the contrary, personal finances don’t come in the shape of a witch to take away your money, they’re not the boogeyman or any kind of monster that keeps you awake at night.
There’s even people that say they don’t believe in personal finances because they assure that they don’t care about money, but spend like there’s no tomorrow and every time they get a bill they regret everything they said or left undone.
Although there should be a class in middle or high school that speaks about the correct ways in which to manage money, it’s true that the topic, even in families, can be a bigger taboo than even sex.
If we do well, we sometimes learn from the friend of a friend who almost lost everything. Worst case scenario: we have to face the sad reality of our finances and end up banging our head on the wall because we didn’t do enough research on that credit card we own or end up losing money because we refuse to invest.
With these kind of ideas we have about money, it makes sense that we think someone who’s in control of his finances is just lucky, corrupt or has some kind of financial genius. What’s true is that even graduates from the most prestigious schools make plenty of mistakes in that regard because it’s easy to.
You don’t have to be an economist, financier or administrator to know how to manage your money. In personal finances you don’t need to know anything besides adding, subtracting, multiplication and dividing. In very rare scenarios you’ll see some strange signs, undecipherable equations or millions of numbers.
We are afraid of personal finances because we don’t know how they work, but what we continually forget is that it’s a discipline that, even if it doesn’t seem like it, was invented by men and is accessible to anyone.
Personal finances and their importance
They’re the science of money management. They implicate every financial decision and activities of a person or family: from the way they obtain money, even to the way they spend it, going through saving and investing.
Personal finance questions include the purchase of financial products like credit cards, car or life insurance, mortgage, the way you manage your taxes, retirement savings and of course, anything having to do with banking, like checking accounts, savings accounts and online payment services. All individual financial activities fall under personal finances.
They are of key importance to everyone because they’re a set of tools that help us have a good quality of life. They are useful to achieve any goal or objective we set. After all, that trip, house or car won’t buy themselves.
To achieve them, we need to have a process of planning and analysis that will help us become conscious about our situation. Thanks to them we can know if our goal is something we can actually achieve or if it’s too ambitious. In case our projects are too big, they also can give us the tools to achieve them.
How to lose fear
At some point in life we’ve all been anxious about money, but worrying about it only creates stress that can even lead to health issues. Worrying too much to the point of ignoring the problem just makes it worse.
It’s time to start overcoming those fears facing the reality of your finances, step by step. The best way to do this is to make a balanced spreadsheet, even in a notebook, adding the available amounts from credit cards, then subtracting all your debts. The result is your net worth.
If the number is positive, that’s a good sign; if it’s not, that means you’re in debt and that’s proof that you need to face your fears. From here, start taking baby steps to take over your finances:
- Check your balances once a week and monitor the expenses you made.
- Open your bills as soon as you get them and pay as soon as possible.
- Make a budget taking into account your possibilities of making new payments.
- Establish financial goals on a longer term.
If you still feel overwhelmed, ask for help from friends or family. It’s not necessary to enter into details if you don’t feel comfortable, but the more you speak about the topic and the more information you look for, the faster that fear will go away.