Personal finance seems easy. It's not.

Spend less than you earn. At its core, that’s really what personal finance all boils down to, Hamm writes. But while personal finance advice might be simple, but it’s rather hard to implement.

By , Guest blogger

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    A woman takes a deposit box out of a compartment in the safe room of an Austrian bank in Vienna. Quite often, people are walking out of high schools and colleges without the first clue about how to handle the money they’ll be earning, Hamm writes. They learn via trial by fire.
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One of the biggest criticisms levied at The Simple Dollar – and pretty much every other personal finance site out there – is that the advice shared on it is really obvious.

Spend less than you earn. At its core, that’s really what it all boils down to, after all.

There’s a problem with that, though. If personal finance advice is so obvious, why are 76% of Americans living paycheck to paycheck? Why does the average American household owe more than $7,000 on their credit cards?

Recommended: Can you manage your money? A personal finance quiz.

The reason is simple: personal finance advice might be simple, but it’s rather hard to implement.

Why? There are a lot of reasons. Here are some of the key ones. 

Our culture is based around consumerism, with marketing preying on every fear and emotional desire we have. We want to be accepted and loved and desired. We want to laugh and be happy. We’re afraid of losing the things that we have. Marketing constantly preys on these fears and desires, pushing us toward products that will handle those fears and help us achieve those desires. The instant we let our guards down, these messages take hold – and many don’t even realize that they should have their guard up.

Schools rarely teach sound personal finance basics. Some states and districts require some personal finance education. Most don’t. Quite often, people are walking out of high schools and colleges without the first clue about how to handle the money they’ll be earning. They learn via trial by fire.

Parents rarely teach personal finance either. Often, that’s because they’re uncertain about the topic as well and thus avoid relating those topics to their children. Even if they do understand, parenting can be incredibly challenging at times for even the most patient parent.

Human beings are wired to be creatures of habit – and bad habits are hard to break. If any of those three previous “traps” catch you in a bad personal finance routine, it is very challenging to break that routine and build up a better one. Humans are creatures of habit, which helped us survive on the prairie but isn’t as helpful in the modern world.

Life puts obstacles in your way that you didn’t expect. People suddenly lose their job or their health. Children arrive unexpectedly, as does true love. The routines we’ve worked hard to establish are tossed to the side and we fall back on instinct, which sometimes leads us astray.

The key reason for personal finance advice isn’t to simply repeat the core “spend less than you earn” mantra over and over. It’s to help people navigate those traps so that they can implement that simple advice in their lives.

The idea of figuring out the item with the lowest cost per use might be obvious to you, for example, but for someone who didn’t receive that education in school, it’s a valuable tool to add to their repertoire.

The idea that you can ditch your cable package to save money might seem really intuitive, but for people who have always had cable and view it as a regular bill, the fact that you can live without it can flip a light switch in their mind.

Over and over again, an idea might seem obvious to one person, but it’s not to another.

Beyond that, there’s the issue of motivation. Some people thrive by having someone there with them that’s going through the same journey and also pushing them to make better decisions in their lives. That’s why athletic coaches always have a place, as well as professional coaches and countless other people who push people to succeed at something they could do themselves. They provide motivation and encouragement.

In the end, the core idea might be obvious to some, but not everyone. Actually doing it? That’s much harder than it sounds – and every little nudge that gets someone moving a bit more in the right direction is a big help.

The post Isn’t Personal Finance Advice Obvious? appeared first on The Simple Dollar.

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on www.thesimpledollar.com.

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