THE UNSPOKEN TRUTH ABOUT OUR RELATIONSHIP WITH OUR MONEY (BABY STEPS Part 1)
It seems that the old saying of keeping up with the Jones has now been replaced with Instagram flex and TikTok trends. Though technology around us grows at unparalleled speeds, the knowledge of making, keeping, and growing money has been stagnant. We live in the world of instant gratification and digital currency that is predominantly borrowed credit. Well, the uncomfortable truth is now facing us all in the face. Inflation has entered into the global markets and USA is feeling it’s effects. If it is one thing this pandemic has taught us is that many Americans can make money, but the concept of keeping it and growing it is an elusive concept. Though things sound bleak, there is now a light at the end of the tunnel. The global markets have been rocked by the pandemic and many Americans have realized that the subject of money can no longer be placed on the back burner of one’s mind while aimlessly swiping your credit card for the new phone model. Here are the 2 initial steps I took to better take charge of my finances:
1. WHAT IS YOUR RELATIONSHIP WITH FINANCES?
The hardest step is usually the first step. How do you view money? Really think about that long and hard. It is a question that many of us (including me at one time) never really thought about. How do see money on a daily basis? Is it hard making money or hard to keep and grow money? What do you want your money to accomplish in 1 week, 1 month, 1 year, and 50 years from now? Maybe everyone has heard of one of this questions at one point in their life, but haven’t really thought about the implications.
Unfortunately, many Americans were not taught accounting in middle or high school (including me)!
“Many Americans are not taught accounting…”
This deficit in education has led many young and older individuals down a slippery slope with the finances. This huge lack in knowledge is already beginning to show with the overwhelmingly large student debt in USA. This is a problem were young people (some who haven’t fully mentally matured) are being granted loans worth tens of thousands of dollars.
2. ESTABLISH A LEDGER FOR HOW YOUR MONEY IS BEING SPENT
But seriously I never REALLY knew where my money was actually going on a day-to-day basis. When I left home and entered into college, I easily spent $50-100 a WEEK on items I thought were important (but weren’t). It took me awhile to start to think to myself, is the item I am about to purchase a want or a need? A majority of the time, it is something that you could probably go without. It goes without saying that the most important thing anyone can do is ESTABLISH a relationship with yourself and money. It will be an extremely large pill to swallow for some more than others, but the first step is always the hardest. So now that you know a bond needs to be established between you and your money, how do you go about doing it? Well lucky for you, we now live in the age of technology! There are many apps that are user friendly when it comes to tracking your bank accounts, investments, credit score and more! On easy app that I absolutely love and tell everyone about is Intuit Mint. It is an easy app that I have installed on my phone and allows me to establish a relationship with my money at all times. I am able to see everything that I have including any debt. Having this birds eye view of my finances has allowed me a sense of control and respect for the money have and grow. Additionally, I am actually able to see how my overall money has either declined or grown over time. This is a powerful step in taking charge of your finances. Additionally, if you don’t want the app on your phone, this platform is website friendly for computers too. Another way that I budgeted my money before using fancy apps was good old Excel. This was the way my parents taught me about planning and budgeting my money as a kid. So if you don’t want to use a third party site to have access to your information, creating an excel sheet that is detailed regarding all your personal finances and debt is also an option. However, when taking this approach, make sure you are consistent with all your purchases and frequently update your finances at least weekly.
3. SET-UP A BANK ACCOUNT
According to the Federal Deposit Insurance Corporation (FDIC) nearly 95 percent of U.S. households have a bank (approximately 124 million households). The FDIC reported that the number of U.S. households that have a bank, “… is the highest number and percentage…” since the survey was first conducted in 2009. While 5 percent of U.S. households are classified as unbanked.
“While 5 percent of U.S. households are classified as unbanked”.
https://www.fdic.gov/analysis/household-survey/index.html