In our last personal finance post, we discussed some of the reasons you may have an unhealthy relationship with money. When it comes down to it, personal finance is quite…. well, personal. The relationship we have with money/our finances is no different from the relationship we have with people, so there really isn’t a one size fits all solution. However, while many of us are capable of removing negative people or influences from our lives, we often have a very hard time kicking bad money habits. Habits tend to be deep rooted and longstanding, to the point we often don’t realize they exist.
It wouldn’t be farfetched to assume that many of our readers have had challenges with money. In fact, many of those who reached out to us have expressed that their first real relationship with money was racking up debt on their first credit card. Several individuals in this group attributed this to a lack of education and transparency around finances in their household growing up.
The other group advised that they grew up in a household where the basics of financial literacy were taught but once out on their own, they had a difficult time applying the concepts independently. Some of these individuals had parents who were business owners or who were raised to be responsible with money by their own frugal parents.
What we discovered as we took a deeper dive, is that both groups, regardless of their upbringing, encountered struggles with money. The struggle was typically tied to two major influences.
- Survival: Whether it was a struggle surviving in a world where the cost of everything was increasing, while salaries remained static or a lack of well paying jobs, the need to survive led to increase debt loads. From pay day loans to banks handing out credit cards despite poor credit, it almost seemed as if they were set up for failure.
- Keeping up Appearances: As people enter their late teens and then adulthood, there is sometimes a feeling or a need to fit in and live up to an unsustainable lifestyle. Young adults often fall into the habit of living beyond their means, whether its to keep up with friends who are in a drastically different financial situation or the influence of the media.
- A Little Bit of Both: The most dangerous circumstance is a combination of both. With the influence of social media and with housing, food and transportation costs being at an all time high, we often find ourselves walking the line of either one or falling victim to both of the above. This is more apparent in young black people today, where the focus is all too often on buying the newest Jordans or the newest iPhone and not on setting a strong financial footing for the future.
So where do we go from here? It’s our responsibility to position ourselves for a good financial future but it is also our responsibility to prepare the next generation for the same through financial education and mentorship. Let’s ask ourselves (and if you have children, nieces, nephews, siblings who are entering adulthood) the following questions.
- How does money bring value to your life and how does it impact your quality of life?
- How does money influence your daily decisions?
- Do you feel you have a good handle on your finances (including your debt)?
Take a moment to reflect on the questions above and maybe get your friends and family involved. You may find that despite being in the same household or social circle, the responses may differ greatly from person to person. In the next post, we’ll share the responses of 3 individuals from different age groups, living different lifestyles. Let us know your thoughts in the comment box below or send us a note at [email protected] or on Instagram.
– Team BoT