They say money talks but we have an aversion to talk about money ourselves. It's a very personal topic and everyone you know is in a different place. That's why keeping up with the Joneses is an attractive way to follow money wasters into debt. We don't know where someone's at and its none of our business, but staying in the dark about smart money matters is anything but attractive. I propose that even if it might be hard to talk about the details with family and friends, discussing basic money management with people you trust is more than just an important topic but a necessary way to avoid making the same mistakes.
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| Enjoy money management! |
I began noticing one of the most common attributes in the business-minded people I know was that money management is actually fun for them. Just like being a sports fan or becoming invested in a hobby, talking about good ways to earn, invest and manage their money served as both work and play for these people. On the surface from a conservative perspective it often just seems like boasting or posturing when people talk openly about these topics. Certainly using specifics in casual conversation can be not only inappropriate but down-right rude. But what happens to a culture that doesn't even bother to educate itself about finances?
The American debt crisis foreshadowed the current state of our individual debt problems. At the end of 2016 the average American household had over $130k in debt* due in large part to credit card balances and student loans. Spending money comes naturally to a culture that tells itself "you deserve to be happy" and "everyone should go to college". What doesn't come so easy is understanding what it takes to be responsible with money and balancing a personal budget. While these skills seemed to be completely absent in the curriculum of my public education, the encouragement to spend was everywhere in advertising and pop-culture.
But despite a lack of financial education or social acceptance around discussing the topic it is vital for how we live and work in modern society. Understanding what things cost and what they should cost is how we know when we're getting a good deal or to avoid bad ones. Researching any big money decision may seem like a no-brainer but most the time we do research based on our own perspective and general income level.
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| Value can be deceptive |
For example if someone told you that a certain piece of film equipment on a movie set was worth more than your brand new Ford Focus you might think that's insanely expensive. But if that equipment has a low demand, high customer value and significant return on investment you might begin to understand that from the right buyer's perspective it's a good price. Your car on the other hand may lose around half of it's value after just three years and while you probably won't be looking to cash out so soon it should change the way you look at the price of a new car.
The moral of this story of course, knowledge is power. Avoiding money-talk because it's boring or "impolite" may leave us in the dark about smart ways to save, manage and invest. The more I've looked into the details the more motivated I become to learn anything I can. So while there is a time and place to discuss private matters like what rent for a one bedroom apartment in Los Feliz should be, the more we talk about these things the more interesting it can become and the scary details related to finance start appearing as opportunities instead.
*Nerdwallet.com
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