Personal Finance Isn’t Just for Rich People

Personal finance writers are snobs. We talk about how everybody must pay off those credit cards and save a minimum of ten percent each month. But what can personal finance do for you if you’re just trying to make ends meet?

Personal finance writers are snobs. We talk about how everybody must pay off those credit cards and save a minimum of ten percent each month. But what can personal finance do for you if you’re just trying to make ends meet?

Recently Mighty Bargain Hunter mused: Are savings tips unhelpful to those who need them most? That article was in response to the MSN article: Too Broke to Save? Never.

It got me thinking about one simple truth: Personal finance is not about getting rich or staying rich!

What the heck is personal finance, then?

Personal finance is the art of using the money you have to live independently.

Think about that for a second. With all this talk about savings accounts and credit cards we often forget the very simple, yet very elusive, goal we are all trying to acheive: An indepenent life, and hopefully, after that, the ability to live the life we choose.

If you’re unemployed or supporting a family on two minimum wage jobs, living independtly is the only concern. Usually the lottery seems like the only ticket to the life you would choose.

For low-wage earners, personal finance goals are the same: spend less than you earn, get out of debt, and save.

Managing to save or invest money is more challenging when you’re scraping by, and if you can save you should have different priorities. Rather than saving for luxuries like retirement or vacations; savings goals should be focused on living as comfortably as possible on what you earn and on earning more. That means extra money is best used for going back to school, moving to a less expensive area, or starting side work.

If you can find a living wage you should be able to live comfortably. But to do it, you need personal finance. In fact, you need personal finance a lot more than somebody who makes enough that they don’t worry about daily spending.

It can be hard reading about the lattes and dinners out that other people balk at cutting from their monthly budget to save money, but it is a reminder of how we fall into the trap of consumption.

The biggest but most preventable threat to financial stability is wanting more. We watch TV and read magazines and we want the latest clothes, the coolest cars, and the biggest homes. And while most of us accept that we cannot afford a BMW or a mansion, we are always tempted to get something that is just a little bit better or newer. But often it’s that “just a little” bit that we can not afford. Yet thanks to loans and credit cards, they always make it seem easy to get that little bit.

When’s the last time you got “just a little” more than you could afford? Was it a new pair of shoes? An extra round of drinks? Leather in your car? And you know what? It never ends. Because even if you become rich beyond your dreams, there will always be more — bigger yachts and faster jets.

Despite what every advertisement ever made is trying to tell you, money doesn’t make you who you are. Not your car, not your home, not the clothes you wear! Now of course those things make impressions. But other people’s impressions are not your character. Their impressions are not your values. They are not your soul!

There are millions of people out there competing for your hard-earned money including, perhaps, us personal finance writers preaching about the fires of debt and finding redemption of saving. Resources like this site can give you the knowledge and tools to resist temptation, earn more money, and spend and save wisely, but after all, personal finance is personal.

Whether you make $5 an hour or $500,000 a year; only you can figure out how to best use your money to get by, to get ahead, and hopefully, to be happy.

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About David Weliver

David Weliver is the founding editor of Money Under 30. He's a cited authority on personal finance and the unique money issues we face during our first two decades as adults. He lives in Maine with his wife and two children.


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    FIRE Finance