Today we are going to look at Finances and Family
Spending within your means and saving to build financial security are the foundations for a high level of financial wellbeing when you can no longer work.
But since human are naturally wired to want instant pleasure over delayed gratification, money issues can be abstract, complex and emotionally challenging to navigate.
If you’re looking to improve your financial smartness on earnings, savings, spending and investing for yourself and your family, here are some useful ideas to start to live by.
Avoid making financial decisions when emotional
Researchers in one study offered several groups of people the choice of some money now, or a bigger sum in a couple of weeks. The choices had images. The only category who refused to make the smarter decision of a potential payout were men seeing pictures of extremely desirable women besides an instant payment opportunity.
Many experiments have found that, relative to those in a good emotional condition, people who are depressed would pay more for anything or sell for less. High stress can lead to financial decisions which are impulsive or irrational. The age-old advice of “sleeping on it” in these situations makes much sense – take the time to calm down and feel better before you decide to do anything irrational with your money.
Teach Your Kids Financial Literacy
Teach your kids the importance of financial literacy from a young age. Give smaller kids the responsibility of keeping a piggy bank with their pocket money and let them learn the value of saving so that they can purchase toys that they want with their own money.
As your kids get older, consider opening a current account for them so that they can learn where their money goes, how it is stored and how responsible transactions work. Doing this as early as their early teens will help set them up for handling their money in their later teens when they start working or have student loans etc. to handle.
All pounds are equal
Research shows that we treat money differently, depending on where it originated. We are more likely to spend a rebate than a bonus.
Cultivate the habit of treating all your income types equally – whether salary upgrades or bonuses, pension earnings, premium bond winnings or tax rebates. That means considering every income type as money and of the same priority.
Forget Love Island
it has been found that watching a lot of reality tv or access to social media “lifestyle” raises people’s sense of inadequacy and vulnerability if they don’t adhere to the stereotypical outward appearance or curated “good” lifestyles on display. This may result in impulse and emotional spending to fill the gap. If you can’t stop watching reality television at least be honest about what matters to you in life and what happens to you.
In the end, it comes down to the willingness of every member of the family to live within the means of the family and decide what is important and what is not, what needs are from want.
Finances and Family is a feature post