The first rule of personal financial management is to spend less than you earn! It sounds really easy and makes sense… so why are so many of us in debt?
To begin to understand why it is so easy to spend more than we earn, have a chat with your grandparents, or someone else from that generation who love to talk about the “good old days before computers and the internet“, you could learn something quite fundamental about financial management.
I am blessed to have a grandmother who was born in the late 1920’s and who is still with us. She has seen a lot of change in her life time, and I asked her how the family managed their money. To cut a very long story short (talking a lot runs in the family) this is what she told me.
“My Dad would come home from work each week with his pay packet and sit with my mother at the table and he would hand over what was left over – after he had taken what he wanted. It was up to my mother to pay all the bills from what she had left. She would carefully divide the cash up and put into the various jars for rent, food and other bills. My sister and I would anxiously wait to see if there was a coin or two left for us, most times there wasn’t but sometimes we were lucky. It wasn’t an easy life, we didn’t have much, but my mother always managed to put food on the table and shoes on our feet.” Continue reading →
It is hard to gauge exactly how much of a factor arguing about money contributes to relationship breakdown, but along with sex, it is pretty high on the list. Lack of trust and communication are at the heart of both issues.
As a money mentor, I frequently meet couples that just don’t talk about money. I was catching up with a girlfriend over a coffee and happened to mention this to her and she was quite surprised. “Bill and I talk about money all the time.”
There was a few seconds silence (while taking a bite of her scone) then she said, “no you’re right, we don’t talk about money, we yell at each other about money.”
Why is this? Well sometimes the arguments are really about money, but money arguments can also mask other issues within the relationship. This is because we attach emotions and meanings to money that really has nothing to do with 1+1=2.
So if you are yelling at each other about money, listen very carefully for any underlying issues.