why people struggle with money

Hey, good people!

Here’s to my first list of anything. Are you excited like me? I sure hope so. I wanted to keep this one short and sweet but it’s not.

Anyway, Let’s be real. You or someone you love is struggling with money. If you’re struggling with doing the right things with your money, don’t be shy.  Let’s talk about it.

Consider that with all of my posts, I attempt to do a little story telling.  I want my readers (hopefully you will be a regular, please don’t leave me) to understand that I’m not judging you. I’m offering my perspective based on my experiences (including mistakes) or just learning by watching others make mistakes.

 

Below are my top five reasons why people struggle with managing their money.

 

1. Some People Struggle With Money Due To Fear or Ignorance

 

Unfortunately, some people were never taught the value of money or how to make a dollar out of 15 cents. This includes saving, budgeting, investing and bill paying. This even goes deeper if it’s a generational thing. Consider that if you were not taught to save at a young age, it can negatively affect you as an adult.

There are people out there who still don’t understand what automatic bill pay is and still utilize the check cashing place. The ignorance is real. They feel it’s easier to ignore when it’s really not that hard.  Some people treat financial literacy like it’s evil. Financial literacy is not the enemy.

Some people are scared. They cringe when money is brought up. They love to say how they are not good at math or it’s not their thing. You don’t have to be a financial whiz, however, it’s important to be able to manage your money. You can hire someone else for the more complicated financial situations.

Don’t let ignorance or fear keep you in the dark about what’s going on with your money. At the end of the day, no one is going to care more about your money than you.  I encourage everyone to make learning about money enjoyable. You can do anything you put your mind to. It’s never too early or late to start learning about money.

 

2. Folks Struggle Due To How They Were Raised

 

If you are one of those parents that teach/taught your children about money and created that happy balance of needs and wants, I applaud you.  Move on, this section is not for you.

A lot of us (including myself) were not taught about budgeting and saving at a young age. Some people were raised in a household where money was non-existent.  In those circumstances, there was no need to learn about saving money or budgeting because whatever came in went right out to bills.

Some learned poor money habits from parents that were passed down from their parents. It’s a harsh reality.  In other situations, parents due to their own lack of knowledge didn’t set the right example. They spent their money quickly and didn’t worry about the future.

In my opinion, learning about money starts at home. If parents aren’t showing children the value of money at a young age they are setting them up for failure later on. Meaning  If you’re constantly giving, you’re creating a mindset of entitlement. I think there should be some form of balance in the process.

For instance, only give allowances for tasks completed. Yes, there are some parents that give their children a certain amount of money every week because they have their last name. Show them the value of a dollar. Get your child a piggy bank at a young age until they can understand what a bank account is.

Make sure they understand how to budget by showing them the price of items they want. Start training those little minds to be smart about their wants and needs. Example. Video console or $150 to get 10 things off your wish list. Give them choices with some understanding of instant gratification.

 

3. Folks Struggle Because They Don’t Care About Their Finances

 

Some people like to call this fear but I’m biased.  It’s about to be 2018. I think some people just don’t care. Fear will make you figure out what you need to do to correct your financial situation. People that care will at least pay someone else to manage their money for them.  People that don’t care continue to do the same thing.

People that don’t care continue to make excuses.  They’re always broke. They live for the moment. They’ll take from others if it meant they can have more money. They don’t want to think about it or even want the help. They tune you out and it’s really sad. These are people who will constantly say “ok, I hear you” but two years later are in the same predicament.

Trust me, I’m not trying to be judgmental. I’m very aware that we all are dealing with different circumstances. However, I think we all know someone like this.  They know better and are capable of doing better but won’t because they don’t care. You can read a small mention about my experience with dating someone who didn’t care about money here.

 

4. Poor Money Choices 

 

poor money choices

 

 

 

Living Off Your Credit Card

Credit cards are great to have but you have to be careful. You can easily purchase something for $40 one day and 3 days later make another purchase for $50. If you keep this trend up you’ll be $350 (or more) in the hole by the end of the month. If you pay your credit card balance off every month you’re awesome and this section is not for you.

This section is for people who swipe and swipe with intentions of being able to pay the balance off every month but can’t. To solve that problem, if you can’t pay it off every month or at least give more than the minimum payment, don’t use the credit card.

If you are one of those people who like to use your credit card to pay for gas and unable to pay it back monthly, stop using it.  Those small charges add up.  Consider that when you use your debit card the charges come out immediately.

By using your debit card, you can budget out accordingly. If you’re using a credit card it may be hard to pay the total balance at the end of the month.  Start using your debit card or cash and you’ll see how quickly you’ll change your behaviors.

 

 Not Making Saving A Priority

I think this is probably one of the biggest reasons I noticed some people struggle with money. I’m a firm believer that no matter how much or little you make, you can save money.  Of course, this would look different for someone in an extreme situation. These people have good intentions and want to do better but struggle.

For example, someone making minimum wage with 6 mouths to feed may struggle because their paycheck doesn’t support their income. However, there are people who just don’t make saving a priority.  Some people underestimate the power of saving. I believe in the power of every little counts.

Consider (and I’m going low for those that say “I’m broke”) that saving $10 every two weeks (considering you get paid bi-weekly) is $260 a year based on 26 bi-weekly checks in a year. Try doing $20 per pay period and that’s $520 a year. It doesn’t sound like a lot BUT its $520 more than what you had before. That can be your flight trip to Mexico or Las Vegas that you wouldn’t need to charge.

You should apply this rule to job raises too. Sometimes raises don’t appear to be working in our favor. Some may think that receiving an additional $30-$60 per pay period won’t make a big difference, however, consider adding it up for the whole year and you may change your mind. That $60.00 every two weeks is $120 per month and $1560 per year! That’s how savings really work.

 

People Struggle By Living Above Their Means

You don’t need to be a financial expert to learn this. It’s very easy to do. You want to LIVE and I get it. I want to live too. You work hard so now you want to reward yourself. I’ve been there and I’m a recent recovering spendaholic.

There was a time that I justified my Amazon purchases because I didn’t buy a lot of clothes or spent a lot of money on going out. I was buying electronics and just things I didn’t need because I could get it cheaper and it came within 2 days.

Amazon is great when you actually NEED the items you’re purchasing. So, I am not arguing that. I’m arguing the impulsive need to buy books, CDs, and gadgets that are not necessary.  I don’t feel the need to reward myself with materialistic things. I’m more into traveling these days.

Living above your means applies to those with the expensive car notes that they barely can afford. People love to create the perception that they are living well based on what they’re driving. I get it. Some people want to reward themselves for hard work.

Want a luxury car? Just be careful. Before adding a $400-600 for a car note make sure you can afford it. Consider getting a certified used model of the luxury car you want. Remember that BMW and Mercedes cost a lot of money to maintain.

Want new furniture because your friend or family has that new leather set? Instead of replacing old furniture, buy a cover to hide those rips and tears. If your couch is sinking, measure out the width and length of each seat and have someone from Loews or Home Depot cut you a piece of wood to deter your furniture from sinking. I did that when I wasn’t making much money and I was happy I did because I eventually was able to buy new furniture.

Also, just because you’re able to live above your means doesn’t mean you should. I can use myself perfectly for this example. I justified living above my means because I was able to pay my bills and felt I deserved it. If you read my first intro/article on money, you might have read something about me having a lot of credit cards.

Everything was cool because I was able to make automatic payments. Things became real when I realized how much I was paying a month in automatic payments.   Automatic payments are great for ensuring your debts are paid on time BUT when you know everything is paid you tend to not check those statements.

It’s always best to live under your means. Remember those times when some of us were making $20k less and still making ends meet? You made it work right? Now some are making more and can’t figure out why they are still struggling. Yes, inflation is part of the problem but living above your means is the problem too.

 

 People Struggle Trying To Keep Up With Everyone Else

We often want stuff because someone else has it. We start to envy our neighbors, friends, and family. So, we try to ball out too.  We’ve been told to work hard, go to school, get a good job and buy a house. Often times, we question why someone else has something and we don’t. Don’t compare your self.

Example: There’s a guy named Bill at your job.  You and Bill are close in age. Bill pulls up in his new BMW while you’re driving your old Camry. You’re thinking WTF, I’ve been working here longer than Bill. You suddenly forget how broke you are.  So, you go and get the car of your dreams too.

Don’t be like Bill because you don’t know his situation. He could have had an inheritance or saved enough to purchase the car in cash or put down a hefty down payment. Perhaps he’s like many folks out there that don’t mind spending $500 a month on a car note. It’s not worth it.

If you’re on the fence, consider purchasing a used model of the luxury car you want. This can potentially slash the price significantly. Also, keep in mind those expensive cars come with expensive maintenance schedules. Do we even need to discuss gas for these often “premium gas only” cars?

This same idea goes for buying a home. I don’t care what experts tell you. People love telling other people what to do with their money but never consider if it is good for that person’s situation.  Trust me, don’t listen to too many people when it comes to buying a home.

Unless you can manage the mortgage with ONE of your paychecks (based on two checks a month)  I wouldn’t get it. If the mortgage is more than what I take home every two weeks from work, it’s not for me. Why? I need that other check to live, pay bills and plan for an emergency.

A tip I love to use: Take what you’re paying now for rent, look for the home you think you can afford, and start saving the difference of your rent from your potential mortgage. This will help you see if you really can afford that house. If your rent is $900.00, and you find a house for sale that’s for $1400, save the $500 difference.  This is a great way to see if you can afford it and save money at the same time.

Plus, I love pretending that my household doesn’t  have two incomes. This keeps my household on point because if something happens to my partner (laid off or something medical), we are somewhat prepared. I’m not depending on that money to live. Of course, things do happen but can you imagine depending on that extra check that has to go to your mortgage?

I admit I’m a little psycho about waking up broke. At least, my advice will have you overly prepared.

Home ownership is a great investment if you can afford it. Don’t get a house because you’re married and because people expect you to. Don’t buy a house because your best friend or co-worker is doing it.  Take your time. These houses aren’t going anywhere.

 

spending money

5. No Real Priorities

 

Please don’t confuse my description of making saving a priority with having no priorities and caring. Some people just don’t have priorities. There are folks out there that will stay with someone else for free if they could because having their own is not a priority.

Perhaps their priority is working to live it up on the weekends.  Meaning you have people who never grew up with anything and only focus on getting through the next pay period. I think your priority level changes depending on your circumstances. Consider that there are some people residing back home with their parents (I applaud you) to save up. While others have no motivation to move out.

Some are ok being complacent. We all know someone like this. Again, I blame society for preaching the work hard and play hard mentality. At the same time, we are all responsible for the decisions we make.

As I expressed previously, on several different posts, it’s all about balance. I know what it feels like to work really hard and wanting to have a good Friday evening or a good weekend. The key is adding balance. Then figure out what’s important and what matters.

 

BONUS: Folks Are Struggling Because They’re Not Making Enough

Some people are making minimum wage or even working part-time. Unfortunately, they’re not earning enough to make ends meet. Therefore they are struggling. This is a difficult topic because it’s easier for people to judge and think some people just don’t make enough by choice.

I’m a firm believer that we are all capable of having the life we want but it’s not as simple for some. There are people doing everything they can do to stay above water. Sometimes, advice just isn’t good enough. I get that.

People in these situations have to constantly be reminded that things can and will improve by keeping a positive mind above all. They should be reminded to try to see the positive and be diligent about finding opportunities to increase pay.

If this is you or someone you know, try looking for ways to earn more. Try selling items that you’re no longer using. Cut back on cable, utilities, and lower your phone bill.

If you have a skill, it’s time you share that with the world. Don’t limit your self. We all have gifts. What are you really good at? Leverage those skills to compensate for not making enough money.

Did I miss any struggles? I’m sure there’s more. Please do share. If you’re struggling financially what can you do to improve your financial situation? Please share.