Personal finance has nothing to do with money
Personal finance has nothing to do with money

On a superficial level, personal finance is all about money: how to get richer, where to invest, and so on. All this, of course, is included in the concept of personal finance. But Kristin Wong is convinced that in a broader, more important sense, personal finance has nothing to do with money. It is rather a problem of using them in accordance with their values and priorities.

Personal finance has nothing to do with money
Personal finance has nothing to do with money

Learn to manage your money and they won't be able to manage you

My father used to say, "Money is not a problem, the problem is lack of it." And it is true. Of course, money cannot buy happiness, but being constrained by means is not easy, it brings a lot of suffering. And the level of this suffering varies depending on the situation.

My parents had a difficult period when they could barely make ends meet, and this lasted for several years. They wanted to move to a better area, near a good school, but that never happened. Of course, for some people, the situation was even worse. In a study by Sendhil Mullainathan and Eldar Shafir, the lack of money affects our determination, well-being, and even politeness.

Poverty is not just a physical limitation. It's also a way of thinking. When poverty grabs our attention, we start to think differently. Constantly thinking about money, we begin to notice other things, differently we evaluate our own choices, differently we predict events, we make decisions and behave differently.

Whether we like it or not, money is powerful. Most of us are heavily dependent on them, and this is where personal finance comes in. Personal finance is everything related to the ability to manage money in order to use all its advantages to your advantage. It's about being able to take control of your money. As ironic as it sounds, the main goal of personal finance is to stop thinking about money at all.

Money is not an end in itself, but a means

personal finance, money
personal finance, money

It's easy to confuse money management and money chasing. Of course, it's good when there is more than enough money. But if money is your ultimate goal, you are not running your personal finances correctly. For a long time, I did it wrong too.

After graduation, I wanted to travel. I had a goal: to pay off the loan in order to go to Europe. It was a definite, concrete goal that served as a great motivator to pay off the student loan. After the trip, I began to earn a little more, but I no longer had any other financial goal. In a way, I was going with the flow, my goal was just to accumulate money. This goal was vague and boring, because it was just a hoard of pieces of paper.

There is no point in saving money if you don't know what you need it for. In my case, this sense of meaninglessness resulted in the fact that I eventually stopped saving and started spending mindlessly. There is nothing wrong with that, but if I thought about these spending better, I could save up for something that really matters to me.

It took me a while to realize that money is a tool, not a goal. Personal finance should not be done in order to accumulate as much as possible. Keeping personal finances is necessary to use this tool in order to live the way you want.

The value of money lies only in what you can do with it. If someone's goal is to have a ten million dollar stash, that's an empty goal. What would you like to do with this money? Set goals for yourself based on the reasons why you need to save money instead of saving money for the sake of money. Luke Landes Founder, Personal Finance Blog Consumerism Commentary, Lecturer

This quote illustrates a common misconception. People often think that running personal finances means being anti-spending, when in fact the opposite is true.

There is nothing wrong with money. And there is nothing wrong with spending most of it if it allows you to do the things that make you feel alive. It's important to have enough so that you have a roof over your head and food on the table. I do not support the view that the desire to earn money is a waste of time, especially when it allows us to survive. Just make sure you understand why you are spending. That you see the whole picture as a whole and think over the direction yourself. Colin Wright American blogger, traveler, author of the book "How to Become a Wonderful Person"

In short, money shouldn't be the main goal. You don't have to sit in your pants at a job you hate to accumulate pieces of paper and one day retire and finally relax. You must use money so that you have more of what you love in your life. This means you have to save up a little to quit your hated job and start doing what brings you pleasure.

Personal finance is more about thinking than math

personal finance, thinking
personal finance, thinking

Of course, there are basic rules for running finance.

  • Spend less than you earn.
  • Pay off loans.
  • Invest money so that it generates income.

The rules are important, but they do not cover the whole point of personal finance. After all, personal finances are personal. This means that sometimes you can and should break the rules and do what is right for you. More than math and rules, personal finance is about behavior: your habits, thinking, and actions.

I can even argue that you need to focus more on your behavior than on the rules. You can read about the best ways to pay off a loan, but if you are not serious about it, then you most likely never will.

People often do not manage their finances because they allegedly do not care about money. But, oddly enough, it is for this reason that they have to do it. If you don't like thinking about money, the best way to do it is to be sure that you have created a system for managing it correctly. Yes, doing personal finance means dealing with money. You need to learn how to control them in order to focus on those aspects of life that interest you.