Money management is too complicated. It’s way over my head. I am not good enough or I don’t have the knowledge to manage my money. These are the money management excuses I often hear from others. Is managing your money responsibly and investing for your future really that difficult for the average person?
Do you need a finance degree or above average intelligence to manage your money? In my opinion, no. You don’t need a finance degree or have an Einstein-like intelligence to manage your money. Those are not the requirements, but it can give you an advantage if you have either. So what does the average successful money manager looks like? What characteristics do they possess?
The answer is… wait for it… drumroll, please. They look like you and me – the average Joes and Janes. Anyone can be a successful money manager. All you need is a little common sense. Okay, not a little, but quite a bit of common sense. A very disciplined mindset. The willingness to learn and take action to apply the knowledge that you have acquired. Bit. By. Bit.
Most importantly, you must avoid and stop making excuses. You have to have a “can do” attitude and tell yourself that you can overcome any of these money management excuses below. Even if you made any of the money excuses previously, today is the day to overcome them. Let’s take a look and see what these money management excuses are and how you can to overcome them.
I Am Bad With Handling Money
People who are making this money management excuse are not bad with handling money. They are bad with their discipline. They are bad at holding back their desire to consume. For example, some people prefer to buy premium coffee rather than to drink the free coffee offered by their employers. Or they mostly buy their lunch or dinner on a daily basis instead of cooking their meals. Or they just get a lot of satisfaction when purchasing something and don’t care if they carry a balance on their credit card.
It’s not very difficult to overcome your consumption habits. Instead of buying your coffee, try the free coffee or make your own. Instead of buying your lunch or dinner, try to cook a couple meals a week. When you make purchases, just ask yourself an honest question, “do you want or need this item?” Try to buy items that you really need and less of the items that you want. Over the course of a couple of years, you’ll develop better money disciplines and will save thousands in the process.
I Don’t Have The Knowledge
No one is born with financial knowledge. Everyone starts with zero financial knowledge and needs to take the time and effort to acquire the knowledge. I have been blogging about personal finance for a while now and I believe that you can browse through my blog to help improve your financial knowledge. If you are keen to expand your personal finance horizon, check out the 10 passionate personal finance bloggers to follow post to get started.
I Am Not Smart Enough
As I mentioned earlier in the post, managing your money does not require superior intelligence. It requires common sense, discipline, and commitment. It also requires a positive mindset and a “can do” attitude. If you start with a negative mindset, you’ll eventually convince yourself that you won’t be able to do it. Instead, change the script. Convince and remind yourself that “you are smart enough” to manage your money.
It’s Not My Top Priority Now
Fair enough. It doesn’t have to be your top most priority, but it should at least be in the top three. Let’s take a look at some of the most common activities in our lives. On a daily basis, we eat to survive, we live in some sort of shelter, we use some sort of electronic device, we travel from home to work and the list goes on and on. What do these activities have in common? Most of them involve money directly or indirectly. If your life is revolved around money, wouldn’t it be prudent to make managing this finite resource a high priority?
I Am In Too Much Debt
This should not be your excuse to avoid managing your money. In fact, it should be the reason why you should start managing your money now. Before your debts consume and take over your life, take control of it by getting help to manage your money. The first step to get out of debt is to spend less than your income on a monthly basis and use the remaining money to pay off your debts. It’s no fun and it can be painful, but it’s a step in the right direction towards debt freedom.
I Have No Interest In Managing Money
Being responsible towards your money sucks. Deciding if the things that you are buying are items that you need versus the items that you want is no fun at all. No wonder that you don’t often hear anybody saying, “I had so much fun staying within my budget this month.” Just because managing your money responsibly is boring doesn’t mean you can’t be motivated to manage your money.
For me, whenever there’s free money to be had, it always stirs my interest. For example, I earned a 72% return on my savings. I got paid to borrow money from the bank. I saved an extra $200,000 when I increased my debt. Did any of these examples stir your interest to manage your money? What I did in these examples, you can accomplish them too.
I Just Pay Someone Else To Do It
There is absolutely nothing wrong with recruiting a financial advisor to manage your money for you. After all, these people do this for a living, so they must be good at what they do, right? If not, how else will they make a living? Even so, how do you know that you are paying a fair price for the service provided? How do you know if your advisor is putting your interest first?
If you do hire someone to manage your money, just make sure that you are protecting your hard earned money. The most important is finding an advisor that you can trust and put your interest first. Secondly, know what you are investing in. Third, understand the risks that come with the investments.
I am Too Busy. I Don’t Have Time
Too busy doing what? Based on an article from ComScore, the average person spends an average of about 2 hours and 51 minutes per day on their mobile device. So, if the average person can allocate about 15 minutes a day on their mobile device, they can read at least one personal finance article a day. Hence, you can read about 365 articles a year (hey, I’ve got more than 50 posts here). When you have read that many personal finance articles, I can almost guarantee that you’ll learn a thing or two about how to manage your finances. Start to use your 15 minutes wisely.
It’s Too Stressful
Not having enough money to pay your bills is stressful. Not having an emergency fund to get you through the tough time if you get laid off is stressful. Having no savings when you are close to retirement is stressful.
Managing your money responsibly is not stressful. If you have been doing that, your bill payments are already allocated and accounted for in your monthly budget. You probably have a couple of months of expenses saved in your emergency fund. You will most like have a portion of your salary directed to your retirement account for every pay cheque. Hence, you are actually decreasing your money stressors if you start managing your money responsibly.
I Don’t Earn Enough Money
Your income has nothing to do with your ability to manage your money. If you are in the bottom half of the median income scale based on the latest Canadian Census, it makes it even more important for you to manage your money. Just because you are not making a high income, doesn’t mean that you cannot save and grow your money. If Ronald Read was able to amass $8 million dollars over his lifetime on a janitor’s salary, I think that it’s possible for the average person to at least amass 10% of his success. This means that it’s possible for you to amass at least $800,000 if you try.
My Two Cents
Money. it’s around us and we use it every day. Those who manage it, save it and grow it, will benefit from it. Those who don’t pay attention to it and don’t manage it, will not have enough of it. They will struggle to earn it and have trouble keeping it. Money. Love it or hate it? Doesn’t really matter. Just learn how to manage it. Responsibly.
So, do you manage your own money? If not, which money management excuses did you make. How did you overcome those excuses?
About Leo
Great points Leo!
“The most important is finding an advisor that you can trust and put your interest first. Secondly, know what you are investing in. Third, understand the risks that come with the investments.”
This is so true. Even with the robo-advisors that let *anyone* invest with almost no knowledge, it is always better to have a basic understanding of finance and investing. It doesn’t have to be deep learning or complex. But for sure people should have a grip on the basics. Then they can at least understand what they’re investing in.
@Brad, if you are handing over your hard earned money for someone to manage, you better be darn sure that that person is putting your interest first. Otherwise, we will be hearing excuses such as, “why didn’t I just take the time to manage my own money?” Regardless if you are managing your money or not, you still need to do some work to ensure that you are reaching your financial goals. A person without any financial goals is like a sailor without a compass to navigate.
In my 50 years of investing in something, starting with the first income property that we owned till present day I have met hundreds of people from all walks of life that have done some form of investments. Many before the advent of internet, that simply bought houses for they & their family to live in, loaned money to people, invested in second mortgages, used a ‘on the phone’ stock broker to invest or simply using the old fashioned approach to invest in CD’s/GIC’s or HISA.
IMO, there isn’t a ‘one fit for all successful investor or money manager’ – take the example of a ‘professional’ stock broker or a CA/CPA both could have the worse, poorest investments, live in rented accommodation which is no different than a mechanic driving a crappy vehicle, or a plumber having the worse plumbing to a medical practitioner/dentist in the worse health.
So this is about ‘healthy money management’ some folks haven’t a clue while others it comes natural. A trained FA is not always the best person to manage your money… you are. Some folks fall back on their upbringing or what their family situation was around money.
It’s what makes sense to the individual, if it doesn’t feel right or folks think they are being conned… then don’t go there.
Looking at others success doesn’t make you a successful copycat.
@John, I agree with your view that you are your own best money manager because you know your own money habits. I’ve always followed the philosophy of, “it’s your money, you should be responsible for managing it.”
So true. My recent post actually said no excuses! Inflation is raising the price in everything. Its time to invest now.
@PassiveCanadianIncome, inflation is definitely a huge reason why we need to invest and grow our money. Otherwise, your money will just keep on shrinking day by day. A million bucks used to an awesome amount of money. Now, you can barely afford a detached home in Toronto. In Vancouver? Don’t even think about it.
One book that really made a difference in my life both personal and financial was “No Excuses” by Brian Tracy. He refers to those excuses more like a disease and calls it “EXCUSITIS”. In this book, he also highlighted the importance of self-discipline and I could not agree with him more. I’ve had issues with self-discipline myself until I came across this book, And as I’ve said many times, knowledge is not enough to be financially free. Motivation and self-discipline are very important ingredients for success.
@Bernz, I haven’t come across Brian Tracy’s book yet, but it seems like a book that I should definitely read. I think discipline is the opposite of excuses. Only people who lack the discipline to set and achieve any financial goals make excuses. It takes discipline to manage your financial affairs responsibly.
Yes, it’s definitely worth reading it.In fact, I still read it from time to time whenever I feel lost and need a little reinforcement. Self-discipline is the key. If you have the discipline you will take action.
No excuses! I have some friends who have excuses, they are scared of getting into the market, but aren’t interested in learning. I think it’s a matter of personality really. I’m a no-excuse kind of person and I don’t like it when people make up excuses or whine but don’t do anything about it. Ha 🙂
@GYM, the excuses for not investing because the market is scary is not really an excuse. It’s laziness. With everything in life, your success is determined by how much hard work you put it to achieve your goal. If you don’t have any financial goals, you’ll never achieve any financial success. Plain and simple.
No excuses ever for me… if I catch myself then it’s time to re-assess my goals.
@Erik, I like the attitude. Instead of making excuses, taking action to improve is a much better option.