If you’re like me, you like to dream of what you will be doing when things get better. And even when things are better, you dream of what you could do next. But there is one thing killing those dreams before they even get started.
That is of course, your finances.
Can you cover a $400 emergency?
Studies show that more than 40% of Americans can’t cover a $400 emergency with cash. That’s beyond pathetic in my opinion. It’s simply not the fact that we don’t have the opportunity to earn money. It’s also not the fact that many of us don’t earn enough to save some every month. More and more, it’s being uneducated and lazy with our finances.
That might be harsh, but it’s the reality. The fact is that not much education is being done on how to properly save, budget, invest and spend wisely. Instead, we are letting credit companies and banks (who’s products are debt-based) educate us and our kids on finances and how to handle them. So it’s no wonder that we have come to rely on them for picking up the slack when we decide we want to blow what money we do have.
The other piece to this is the simple fact that marketing has taken over so much of our society. We can’t pick up a magazine, drive to the store or even read an article online without an ad coming into our view. And even if we choose to ignore it, over time it will be repeated and pushed into our psyche without us even realizing it.
So in light of that, here’s 5 ways not handling finances properly can kill your dreams.
1. No freedom to work where or how you want
If you’re constantly worried about upgrading your stuff or keeping up with what the neighbor has, you will probably put yourself in a financial hole. Which means you will likely not be living on an actual budget and staying within the bounds of your income. This leads to not being able to start that business you want or change to a job you would really love, but might pay less.
Financial freedom means more choices to do more of what you want in life.
2. Less time doing the things you love
If you’re constantly working, you will naturally have less time to do what you want. Now, maybe you love your job and it’s exactly what you want to do for 40, 50 or 80 hours a week. But studies show that most people don’t. As a whole, about 70% of Americans are unengaged at work, which tells me at least that many (and likely more) wish they were doing something else.
We only have so many hours in a day. It should be spent doing more of what matters.
3. You may never actually get to retire
Poor handling of finances also means you likely aren’t planning or investing for retirement. Being that I’m in my early 30’s, I’m thankful that we do have some funds in investments that will give us a pretty healthy retirement when that age comes. I know I will never collect pension or retirement from a company, so I need to plan for it myself.
Many people are beginning to realize this simple fact and are preparing themselves for retirement. However, statistics show that half of families have absolutely nothing saved for retirement. And the numbers don’t get better as people get older. For those between 56 and 61, it’s only $17,000.
I just can’t even deal with those numbers and it’s extremely disheartening.
4. Helping someone else is not a possibility
If you’re not handling your finances properly and not making headway with savings, you can’t help others financially. That doesn’t mean you can’t help in other ways, but it often takes money to be able to help someone else through a tough time.
Plus, when you are struggling with something whether it’s money or not, you are far less likely to consider others needs above your own. That’s just human nature. Taking care of your finances, means freedom to invest in others.
5. Your relationships suffer
Many people don’t realize the connection between money and relationships. This would probably affect your spouse more than anyone else, but your close family and friends could feel it too. You will probably be on edge because you’re worried about your paying bills and that means arguments with your spouse. Or if you get behind on payments, you may end up borrowing from friends or family which can completely destroy a relationship.
Money affects more than just stuff. It affects your personality, attention, demeanor and attitude. Handling it correctly could mean the difference between more freedom and happiness in life or one of turmoil and depression.
Where do you get the help you need?
There are few places I would encourage you to check.
- Find a Dave Ramsey Financial Peace class near you.
- Consider someone in your life that has their finances in order and ask them to help you. My bet is they would be honored.
- My email list gives lots of free info to help. I hope you’ll join us.
Originally published at jaredlatigo.com