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The Psychology Behind Why People Don’t Like Personal Finance

By Erik Folgate

If you are a frequent reader of this site, then you know that I am a big believer that behavior has much to do with having success with your financial future. My goal is to help you understand personal financial issues along with helping you identify the behavioral problems that hinder you from becoming wealthy. I identified my behavioral problems in college. I had no concept of what it meant to carry a balance on a credit card and I was horrible about saving money and looking for bargains. You can spit out every financial equation and explain how the stock market works, but that won’t make you wealthy. What will make you wealthy is focusing on the psychological aspect of changing the way you handle money. Saving first, demanding a better deal when you buy something, and always preparing a monthly budget are behavioral habits that will help you become wealthy.

Read this article on Get Rich Slowly from guest author John Wesley about the three mental blocks to personal finance.

John identifies three mental blocks that he believes will keep someone from learning about personal finance and practicing sound personal financial principles. Many people either think that personal finance is too difficult, too complicated, and/or it’s not important. Having had several conversations with friends of mine, I’ve found that many of them have one or more of these mental blocks when it comes to personal finance. Hopefully, this website helps you realize that personal finance is NOT complicated or difficult. I once thought that, but then I started reading books about personal finance, and I started realizing that much of it is just common sense!

For instance, a budget is not complicated at all. The thought of it is complicated, but actually sitting down and writing one out is not that difficult. All you have to do is write down all of your income for the month and all of your expenses for the month. Estimate your expenses that are not monthly installment bills, and then subtract your income from your expenses. Anything left over is used to save, spend, or give to others! Doesn’t sound too difficult does it? A 3rd grader can do the math, so you have no excuses!

Check out that article and let me know what you think your biggest mental block is when it comes to personal finance. What has kept you from saving more money or spending too much money on things you didn’t need? I’d love to know what you struggle with, because I probably struggle with the same exact things.

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

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Comments

  • http://madsaver.com Mac

    True, I have learned a lot by reading the articles on this site and others, but knowing all this information only gets you half-way there. The other part of the journey is taking action to create personal wealth. That’s where I normally stumble. I have an excellent budgeting program (YNAB 3), but have yet to create a budget with it! Also, I’ve done a poor job at investment so far, but definitely have the knowledge to be smart about it. At least I’ve excelled at locating deals & cutting coupons…counts for something.

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