Finance
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| Image generated by ChatGPT on 17 Sep 2024 |
Personal finance can be overwhelming, but there are resources out there to help us make sense of the financial world and make better choices.
This page contains information about the importance of learning the principles of personal finance as early as possible and how to improve your personal finances*.
Importance of Personal Finance
According to a recent Forbes article (and many other sources), in 2024, consumer credit card debt in the United States has surpassed $1 trillion with a "T"! While there are many positive indicators in the economy right now, this statistic is particularly concerning to me because it indicates the level to which individual Americans are struggling to manage their money.
I'm not against debt or credit cards. I use both. But credit card debt is one of the worst (highest interest) forms of debt a person can incur.
If Americans do not get control of their personal financial situations, America's economic future could be bleak. Not only could it drive the economy into recession, but it can create humanitarian crises (e.g. homelessness, lack of food, inconsistent or no access to healthcare).
Those are the extreme, high-level possibilities. But for you personally, allowing personal finances to get out of control means higher levels of stress (which affects health), more tension in your closest relationships (marriage, partner, live-in friend), less freedom/independence, and less ability to help others when they are struggling (generosity).
How To Improve Personal Finances
The only solution I see to this is for me (change starts with you and me) to learn and exercise basic personal finance principles to better position myself for success and then teach those to my children and whoever else is willing to listen. If we all make incremental improvements and share them with others, I truly believe we can move the needle on this.
So, what's the problem then? Why isn't this happening more?
Many reasons probably exist, but one that comes to mind is that people (including me) are fairly secretive about their personal financial life, especially if it's not-so-great. And I completely understand that. It's tough to have useful conversations about this topic, too, because it's very closely tied to our emotional state (good or bad).
But just because something is challenging doesn't mean we should give up on it.
If you are struggling financially, I empathize with your situation (as someone who previously earned ~$20k/year coming out of college). I know what it's like to have your eating out budget be $20 for the whole month. But ignoring the problem will not help to resolve it.
- Start having open conversations about personal finances with someone you trust.
- If you don't have one, find/get a mentor or coach.
- Make time to learn, learn, learn! Knowledge is your most powerful asset.
If you want to learn more, check out the links to external resources below, as well as links to articles from The Devine View.
External Resources:
- Ramsey Solutions (Dave Ramsey): Shortly after my wife and I were married, we attended a Financial Peace University (FPU) seminar and read a few of Dave's books. These resources provided us with a good foundation at the beginning of our marriage, giving us principles to live by as a young couple with not much money. This is a good place to start if you're not very familiar with personal finance topics.
- The Motley Fool: Once you have the basics of financial stability (or "peace") implemented in your life, you'll want to start investing (if you haven't already started). Many investing resources are available at The Motley Fool, some of which are free, and some are subscription-based. I personally do not subscribe to their services, but I do enjoy the Motley Fool Money podcasts.
- Udemy Personal Finance 101: This is one of many free online financial courses that you can "take" to get a better understanding of what money is (and isn't) and how to make wise choices with yours.
- Duke University's Behavioral Finance Course (FREE): After receiving a recommendation, I enrolled in this course in September 2024 and will update on my experience when I've completed it. Behavioral finance is a relatively new concept that was made broadly known by the late Daniel Kahneman's book, Thinking Fast and Slow.
The Devine View Articles:
This list will continue to evolve as new articles are posted to this site, but here are a few recommendations. You can also see the full list of Finance articles on The Devine View.
- Medical Bills Can Be Bogus (Incorrect): Medical expenses are a part of almost everyone's life; and if you're not careful, they can cause you financial heartache.
- Why Big Tax Returns Are Bad (For You): Do you love getting a big tax return every year? You may want to re-think your approach.
*The views expressed here are shared for the benefit of the reader but do not constitute financial advice. For financial advice, please consult a certified financial advisor. Do not make any decisions based solely on what is presented on this site.
