Most people in life have some sort of plan… whether they want to start their own business, how many children they would like, the age they would like to retire or the foreign holiday home the would like to own. But the reality is that most people do not have a ‘Money Plan’, probably worse than that a lot of people do not have any idea how much money they need to be saving in order to achieve their goals and dreams, in fact I would go so far as to say that quite a few people only have a vague idea of their budget on a month to month basis.
Money is fraught with anxiety for many people, now more than ever in the aftermath of the credit crunch and it is the cause of many arguments and relationship issues in couples and families. So hopefully we can look at some of the issues and get us all thinking about small steps we can make to make this topic easier to manage.
In order to begin looking at your financial health it is helpful to understand your ‘Money Personality’, broadly speaking there are several categories that people normally fall into:
The eternal optimist: those that believe ‘something will turn up’. A contract will be won; a promotion with a big rise is just around a corner or perhaps a lottery win!
Those that bury their head in the sand: these people never open a bank statement, dread any phone calls from financial institutions, and possibly rely on the ‘bank of Mum & Dad’.
Life’s too short: these people are generally big spenders, you will often hear them saying ‘you can’t take it with you,’ the problem is a large proportion of big spenders are spending on credit…
The dodgy dealer: everyone knows someone who always has a deal on the go, ranging from constantly switching credit card deals to dodging the tax man.
The problem with all of the above is that sooner or later the spending and/or lack of saving catches up with you. We probably all recognise someone from the list and perhaps you are a mix of these categories?
As boring as it may sound in reality we should all be aiming for a more balanced approach to money and our personal finances. Firstly we need to understand what comes in and what goes out.
Then we need to plan for the short term – emergencies like the car needing a repair or the washing machine coming to the end of its life. The medium term – being made redundant or falling ill and the long term – that holiday home you’ve been dreaming of!
Wishing you good financial health!
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