Personal Finance is Indeed Personal

by David Ning · 14 comments

odd bird
What I love about personal finance is that everyone’s situation is unique. Yet, the more the details are different, the more the solutions stay the same.

What’s more interesting is that even though the majority of us struggle to achieve financial freedom, the methods are simple and for the most part, we already know them.

  • We already know that the key is to earn more than we spend. Yet, we struggle with controlling our expenses.
  • We already know not to buy high and sell low. Yet, we unknowingly fall into the trap of buying the latest hot investments.
  • We already know that saving for the future is important, but we put off thinking about retirement anyway.

So Why is it Difficult?

Perhaps the personal in personal finance refers not just to our unique circumstances but more importantly, that it’s up to us to make a difference. We probably know we need to make more and spend less and we may even know how to get this done. The problem is that we just don’t know how to get ourselves motivated to act.

I know, luck plays an important factor in all this and it’s easy to blame the hand we are dealt. And let’s face it, some people are just luckier than others. Your friends may have joined a start up company early on which then struck it big, or someone you know could have bought a high flying stock long ago and made their initial investment 100 times over. But whatever happens to others have nothing to do with your situation. Personal finance is personal. Stop complaining and start doing something about your own situation.

The Good News

The good news is that it’s easy to succeed even though you may end up being the minority. You just need to:

  • Pay Attention – You may hate budgeting since no one really ever pushes you to keep track, but find a way to pay attention to your expenses and your surroundings. Studying the details will help you find ways to increase your income, and being alert will only help your pursuit to control your spending.
  • Develop a Laser Focus – Not only are a focused person productive, he/she is also determined to never give up. The road to financial freedom is long and you will encounter road blocks. Have the tenacity to pick yourself back up every time you fall by focusing on the prize.
  • TAKE ACTION – The more people I meet, the more I believe in taking action. Everybody fails at one point or another. EVERYBODY. The ones that succeed just try again. Learn to succeed by failing fast.

You already know all this but you may just need someone to beat it into your head again and again. You may or may not like the way I do it, but you can be sure that I will try. Not that I like repeating myself of course, but helping you have been rewarding, not to mention that writing to you helps remind me of these principles as well.

Sometimes people forget, but I’m pursuing the same thing as you too.

Money Saving Tip: An incredibly effective way to save more is to reduce your monthly Internet and TV costs. Click here for the current AT&T DSL and U-VERSE promotion codes and promos and see if you can save more money every month from now on.

{ read the comments below or add one }

  • It’s important to buy not under the influence of emotions but buy only this thing that we really need! If we realize how much we save it will be easier to do this.

  • freebird says:

    If you examine the life stories behind the bloggers who are making their way, I think you’ll find lots of variation in the details, but some general themes recur. Some of us may really need to hire a personal coach to improve our finances, but most I think can make progress just reading and acting on your bullets. You don’t give specifics but that’s the nature of the beast, these will depend on the circumstances and personality of the individual. Once you understand the reasoning behind the message, you can find your own path and share the story!

    Also I don’t think “everybody fails at one point or another”. But I have to feel sorry for those who never experienced it. As my dad used to say if you’re batting a thousand, maybe you’re playing in the wrong league?

    • David Ning says:

      The baseball analogy is awesome. I need to remember that one!

      And I should clarify what I meant by failing. People fail, but some failures may be so small it isn’t near the same league as being in a disaster. I mean, if you bat .900, then you really failed 10% of the time but you are obviously still playing in the wrong league.

      The key is how you look at it and how you bounce back from each failure. Some people, especially those batting .900, then to just brush it off and go right back up full of confidence next time. Others who are hitting .100 may get scared next time they’re up at bat. The light bulb moment is when you realize a major part of the reason why that guy can bat .900 is BECAUSE he is so confident, while the opposite is true for the guy with the weak record.

      If you think you will get there, then chances are VERY good that you will find a way to make it happen.

      • freebird says:

        I think what you describe is what George Soros calls “reflexivity”:
        https://en.wikipedia.org/wiki/Reflexivity_(social_theory)

        Frankly my view is that this isn’t usually a factor for individuals but in the aggregate and especially in economics it’s almost always the prime suspect. While published accounts about people who pulled themselves higher on willpower borne of self confidence make this seem downright common, stories rarely get written about those whose similar attitudes and actions didn’t produce the brass ring. Still I’d I think it’s fair to say that those who aim low rarely exceed their targets by far, so even if the odds are against those who believe, they’re better positioned than those who don’t.

        This question has interesting implications for child-rearing I think. Is it better to have a child who believes that literally anything is possible for him or her? Or should their attitudes be tempered by a realistic assessment of their strengths and weaknesses?

        With respect to bouncing back we can look at dueling cliches, like “the definition of insanity is doing the same thing over and over again and expecting different results” vs the older saw “practice makes perfect”. For someone who failed once, which saying applies? While I have no opinion on whether it’s better to “try again” or “try something else”, I’d certainly agree either of these beats “give up”.

        • David Ning says:

          The danger of a realistic assessment is that most end up being too conservative with their evaluation. Most skills increase with focused practice and an assessment almost never takes that into account. Perhaps a mixture of both “try again” and “try something else” is really the only way to go.

  • Good tips. I especially like the laser focus comment. Once you’ve found your personal finance path, focus intently on pushing the boundaries. I think we all know this, but there’s so much chatter out there and so many people trying to take our money. I can see where many move their money around on a regular basis, then wonder why their strategy is not working.

    • David Ning says:

      What you are referring to, staying the course, is ultra important in savings. Take the recent decision from the British people to leave the European Union for example. Those who panic sold would have missed out on the pretty impressive rally we had since then.

      Pick a strategy and stay through the thick or thin!

  • settleme says:

    I loved the fact that you brought up having laser focus. It is often to stay on track when doing a budget and lack of focus is often the problem. Great tips!!!!!!!!!!!

  • JGW says:

    check out mint.com. they are a new site that does the budgeting for you by plugging in all your info. it’s a good tool to have if you’re bad about budgeting.

  • Austin says:

    Paying attention is so important but no one ever talks about it enough. Being alert not just with finances but actually everything. The more we pay attention, the more opportunities we will see and the higher our chances of success.

  • Craig says:

    It is difficult and a lot of people don’t have the knowledge and jump on bandwagons without proper research. Just learning the basics can be a huge step and then you realize the little things add up, don’t need to worry about everything.

  • FinanciallySmart says:

    Yes it is Personal and we should always take time out to see what we are doing wrong and stop doing it. What I have come to realized is that looking at another person success without getting motivated will not help me to move on. Envious and jealousy will not work stick to what you know will allow you to make it and it will. The rules was set because it has proven and so we should abide by it and success will come.

  • That is a good point David. Sometimes we do forget you’re in it together with us.

    Have you ever used negative thoughts to help motivate you? Such as, if disaster strikes goodness forbid, you need to work hard now and build your EF to provide for your family?

    I like to encourage my discipline at times using negative thought processes, so I can create that sense of urgency.

    • MoneyNing says:

      I don’t explicitly remind myself of the potential disasters, but I’m fortunate in that the fear of what could happen is always in the back of my mind so it motivates me to work hard.

Leave a Comment