Only about half of all American adults are financially literate — and that means that half of the American adults can merely understand and apply financial management, not necessarily that they do. Money management isn’t just a life skill that everyone should have, it is a skill that everyone should use on a daily basis to ensure a comfortable lifestyle and to achieve financial goals.
Yet, many people tell themselves that they don’t need to manage their money, for one bad reason or another. If you are making any of the following excuses to yourself about why you aren’t making an effort to manage your money, you might need to rethink your financial strategy and how you are managing your money.
You Don’t Think Money Is Important
If you find yourself thinking things like, “Money can’t buy happiness,” or “Money isn’t everything,” think again. Studies on happiness and satisfaction find that there is a base level of money necessary to relieve finance-related stresses and provide enough comfort to allow someone to feel happy. While wealthier people are not necessarily happier, people struggling to pay the bills don’t have the time or resources to feel happy as much as they could.
Money is incredibly important, especially if you are on the verge of not having enough. Money management isn’t inherently materialism; even when you manage your money, you don’t have to participate in wanton consumerism that saps the joy from the simple things in life. By managing your money, you can ensure that you are never without your basic needs — shelter, food, healthcare, electricity, internet — so you can eliminate those stresses and feel happier more often.
You Aren’t Good at Math
Money is inextricably linked with numbers, and working with numbers is essentially math. If you struggled in math class, you are likely wary to participate in money management, for fear that you’ll perform a calculation incorrectly and unknowingly bankrupt your family — but that fear is a bit unfounded for several reasons.
First, basic money management isn’t just one big, complex math problem. Rather, it is a series of much smaller, much simpler math problems that rely on arithmetic like addition and subtraction. Secondly, if you do engage in more rigorous money management, you can rely on money management software for the heavy mathematical lifting. You don’t have to be good at math to be good at money, so you should face your fears and delve into your finances today.
You Don’t Have the Time
Many methods of money management are quite time intensive. Some demand weekly trips to the bank or ATM; others require a daily log of expenses. If you are working more than one job or have a family or active social life, you might not have time to devote to these money management tactics.
However, the beauty of money management is that you can choose a method that suits your lifestyle. If you are pressed for time, you should use automated money management tools, which connect directly to your accounts to track your spending and automatically move your money into savings accounts as befits your financial goals. Then, you can’t use time as an excuse for financial irresponsibility.
You Don’t Have Any Money
When you live paycheck to paycheck, money management can feel like a fool’s errand. Yet, it is exactly when you are financially stressed that money management becomes so critical. By participating in money management, you will have more insight into where your hard-earned dollars are going.
That understanding will help you identify how you could be generating wealth — perhaps by increasing your income, reducing your expenses or mitigating the financial risks you regularly take. You will never have money if you believe your lack of money relieves you of the responsibility of money management.
You Don’t Think You Need Money Management
You earn a decent wage reliably, and by nature, you keep your spending to a minimum — so why would you need money management? Your money isn’t doing anything for you just sitting in your checking account.
While financial experts do advocate keeping an emergency savings fund to quickly liquidate in times of crisis, most of what you earn should either be spent to maintain and improve your lifestyle or else be invested in ways to build your wealth even further. You want to put your money to work, and doing so successfully requires money management.
If you don’t understand the first thing about money management, you might consider enrolling in a financial literacy course online or at your local community college. Then, you can start gaining more control of your finances and start building the lifestyle that brings you security and happiness.