Chances are, you probably know you could handle money better--and not just because you ended up on a website specifically dedicated to budgeting. Honestly, everyone struggles to handle money well, no matter how many books you’ve read, and no matter how much you earn. You will never be perfect in handling your finances; you will make mistakes, bad judgment calls, and poor purchases. However, you can learn to get better at handling your finances. The basics are even relatively simple, although that doesn’t mean that they’re easy.
For example, it’s very simple to learn how to bench press 100lbs. But it certainly isn’t easy! In other words, the skills you need to start handling money aren’t particularly difficult to learn, but they do require practice and discipline. Easier said than done, of course. But to start out, let’s talk briefly about some of the factors that may make it harder to start taking control of your spending.
One of the things that can make money difficult is that there are social and emotional factors to dealing with money. I’d like to touch on these complications before we start getting into the technical aspects of budgeting.
Money has huge social implications. Your wealth is a major factor in what social class you’re considered a part of (though certainly not the only one). People are often pressured to buy items that are considered marks of their class. For example, even small middle class families often buy SUVs, and to buy instead of rent their housing.
There are also different social pressures put on women and men when it comes to spending. For example, men tend to be pushed to show off their wealth through conspicuous consumption. This can be through any number of status symbols, from designer watches to expensive cars. For men, there’s a pressure to spend simply to show that you can.
Women, on the other hand, tend to be expected to spend as a social activity. For example, women are encouraged to shop in groups, and are often put under peer pressure to spend more than they planned. Women are also often socialized to spend as a response to emotional stress, which we’ll talk more about in the next section.
Both men and women may overspend as a result of emotional stress. However, women tend to be encouraged to do it much more than men are. How many films include a woman breaking up with her boyfriend and dealing with it by going on a shopping spree with her best friend?
Another major barrier for some people when it comes to taking control of their finances is anxiety--either in the colloquial sense or the clinical sense. Some people avoid looking at their financial records because they’re worried about what they’ll find. Some people may also have anxiety severe enough to set off panic attacks, and the fear of that can be very discouraging. (I know I once went several months without looking at my bank account because every time I thought about it, I started to have a panic attack.)
Finally, feeling depressed or helpless can be a major barrier in learning to handle money, especially for people who have struggled with money for a long time. It can be easy to feel that nothing will ever change, so there’s no point in trying to take control of a lost cause.
The good news is that the techniques I’ll be teaching here--how to develop a budget, monitor your budget, and so on--can help with a lot of these issues. For example, I find that checking my budget every few days helps me feel less anxious and more in control of my finances. It can also help control impulse and emotional spending, because you know you have limits, and you know what they are.
(That said, if you have been going through an extended period of feeling down and/or worthless, severe and repeated panic attacks, or if you find yourself unable to stop yourself from spending, you may need professional help. Many areas have resources available for those with mental health issues and who may not have health insurance or be able to otherwise afford care.)
So, let’s get started with our Fundamentals series. First up, Part I: Balancing Your Checkbook.