All of us find ourselves struggling financially at times but if you constantly run into financial difficulties it may be worth taking a deeper look to see what may be causing it. It is interesting to consider that when we were children we grew up with boundaries and restrictions on our freedom with the parents/guardians making decisions for us. Then when we grow up and leave the nest, we are suddenly hit by the most insane amount of freedom we’ve ever had. Most people cope with this freedom well, but there is a dark cloud that hangs over many people’s heads throughout adulthood – money management problems.
Some can cope very well with budgeting, but for the vast majority, people struggle greatly with this and it presents difficulties throughout adulthood. The best way of solving this issue is to be aware of various bad habits regarding money management, and then you can get to work on ‘curing them’.
Instant Gratification
This is probably the most common reason why people suddenly realize they are out of money a week before payday. Instant Gratification is something contrary to what we’ve been taught growing up and we make a decent attempt to practice it. Waiting is tough, and there is an intrinsic desire to have what we need when we need it, which is, for the most part, immediate.
Here’s the problem with instant gratification and finances – it can often result in impulse spending, throwing cash away where it should be conserved, and just generally leading to poor financial habits. It’s far more practical to build money and put aside those impulse purchases in exchange for long term wealth building.
In reality, if you just went without that $5 cup of coffee each day you might just start building up a solid sum of cash over the years.
Compulsive Behaviour
In recent years it’s become clear that compulsive behaviour is not only related to substances. Today, addictions to food, shopping and sex, are understood as a pathological condition just as addictions to alcohol, drugs or gambling.
The line between “enjoyment” and compulsive behaviour can sometimes be difficult to draw. A great many people can appreciate putting down the occasional wager on one day of shopping but if it means you must borrow money to go through the month, then you have reasons to be concerned.
Compulsive gambling has received a lot of attention in recent years as the online gaming industry has made sure sure no one is more than a click away from an online casino. The responsible operators behind these gaming platforms work together with help organizations specialized in gambling addiction to early detect and block customers showing signs of compulsive gaming behaviour. These operators have implemented various tools on the side of the account holder to set clear budget limits and give advice on how to gamble in a healthy and responsible manner. At the same time, support agents of these online casinos get special education on how to recognize gambling addiction and permanently or temporarily, block someone from gambling. These types of measurements create a safety net but does not replace the responsibility of the individual and it doesn’t solve the problem.
In 2016, the Gambling Commission assessed there were up to 340,000 irresponsible gamblers in the United Kingdom alone, and the problem is not unique to the UK. Similar statistics is more difficult to collect when it comes to other types of compulsive behaviour like shopping, eating or sex. Online shopping is today where online gaming was 15 years ago but the ecommerce industry is much larger making it more difficult to implement strategies adopted by the online gaming industry.
Issues with compulsive behaviour can emerge regardless of social status. When shopping, eating or any other activity moves from a fun, safe form of pleasure and excitement, and transforms into dangerous and destructive behavior, then it’s time to get professional help. You may eventually end up doing things you never would have wanted to, such as accumulating never-ending debts or stealing in order to finance these activities.
Trying to Impress Others
Using the growing up analogy again is quite effective here. When you’re a youngster, it’s quite normal to follow the crowd in an attempt to fit in. Your life almost becomes a mirror image of your peers in some cases, as kids can be easily influenced based on what the ‘popular kids’ are doing. What others think is of huge importance to most kids, and guess what – this flows over into adulthood when it comes to money.
Keeping up with the Jones’ is one of the most common and detrimental causes of money worries. All too often people get nice houses, flash cars, and fancy clothes just to make people think they have money. In most cases, however, it is those that refrain from creating such fickle lifestyles that actually have the money.
Spending is typical, however, spending more than you make is the point at which it turns into an issue (a really common issue at that). Usually, this habit inevitably spirals down to getting people in debt and living paycheck to paycheck to survive.
Understanding of Assets and Liabilities
Eventually, all of us will have to take stock of our financial situation. The account balance or financial records might reveal the harsh reality and the uncomfortable truth that we are living beyond our means.
To protect yourself from this situation, one straightforward strategy for keeping track of your financial habits is to have a strictly monitored individual budget. Sounds fancy, but it really isn’t.
These budgets are pretty much the same as the ones utilized by companies. Financial summaries give you a sign of your financial situation and can help with budget planning. In the most general sense, an asset is anything that puts money in your pocket, and a liability is anything that takes money out of your pocket – simple.
This distinction can greatly help with money management. Start right now by making a list of your assets and liabilities. In order to get your financial life back on track, it’s critical that your assets list is larger than your liabilities list!
When you see all of these on paper or in a spreadsheet, you can work out a plan for dealing with specific liabilities with an aim to eventually pay them in full, and start to build up more assets afterward.If an extra income is what you need then there are many possibilities today to make money online working from home .
Final Thoughts
With all things considered, it all boils down to being in control. In adulthood, nobody else is responsible for our financial health and many difficulties can be avoided by taking control over our expenses. Gain an understanding of your financial position today by looking at your assets and liabilities, analyze your income streams, and make adjustments where appropriate. You’ll be back on your feet, or in a healthier financial position in no time.
