What Is Personal Finance?

Personal finance simply means everything in your life that has something to do with money. For example, buying groceries, going out to a club, renting a house or buying a new car are all related to personal finance because they involve you and money.

As you can see from this description, your personal finances are a very important area of your life because they affect virtually every aspect of it.

This is why it is absolutely essential that you learn to understand money, learn how to manage it and learn how it affects you.

Because whether you like it or not, money will continue to have either a positive or negative effect on you for the rest of your life.

So in this article series we are going to be looking at money, so that you can gain a better understanding of it and how to use it wisely.

However it should be noted that this series is mainly intended for young people, although older people may also find this series of some use.

Show Me The Money!

In today’s society there is great emphasis placed on money, or more specifically, how much money a person has or earns.

In addition to this, great emphasis is also placed on the things we own, our material possessions.

The more “stuff” we have, and the more expensive it is, the more successful we are suppose to feel and the more successful people think we are.

Whether you agree with what I have just written or not (I don’t), the fact is that’s just the way society is and a mindset which begins very early in childhood.

The “More Mindset”

I remember when I was at school it would be “cool” to wear expensive designer label clothes. The only the trouble was I didn’t have any cool clothes, just regular brands my mum would buy for me.

Then one day I asked my dad to take me to the shop because I really wanted a designer label jumper (sweater) so that I could wear it to school. After a lot of nagging, my dad eventually bought one for me.

It cost £50 ($75), and I remember feeling very proud now that I had my first piece of designer label clothing.

When I wore it to school on the next non uniform day, I expected people to comment on what I was wearing. But nobody did! It was just like I was wearing any other piece of clothing.

As you can imagine, this was quite a disappointment for me because I thought that by wearing an expensive top I would automatically become cool.

But I didn’t. In fact people treated me the same, and nobody said anything about what I was wearing.

From then on I decided that I didn’t care what brand was written on my label, as long as I liked the look of something I would wear it.

Spending Money On Things We Don’t Need

The point of this story is that we all spend money to buy certain things that we need in life, and we also spend money to buy the things we think we need.

However a lot of the things we think we need, we don’t, and the only reason we buy them is because someone either directly or indirectly tells us to.

In my case, I thought that by wearing an expensive designer label top people would treat me differently. So my peer group and my expectation of what they wanted, and what they would like, indirectly caused me to purchase something (via my dad).

This is one of the main reasons why young people are so bad at managing and saving their money, because all around them they are both directly and indirectly being told to spend, spend and spend until they have nothing left.

TV Advertising

You only have to look at the adverts you see on TV to see how we are being directly told to spend our money.

There are so many goods and products pushed onto us everyday, all of which promise to improve our life or make us happy in some way.

Of course in order to get these items, you have to spend your money and only then will you get the “benefits” they promise.

As a result of this mass advertising people will work very hard to earn money, so that they can buy these things and live a “better” and “happier” life just like they see on TV.

If they can’t get the money they need by themselves, they will go to extraordinary lengths to get it.

For example, some people will try to win money, some people will try to steal money, some people will try to marry for money and some people will even try to kill for money. All because they want the goods and products the media tells them they should have.

Material Goods Do Not Create Happiness

Unfortunately what these people fail to realise is that the material goods they so desire can never make them truly happy.

Sure they may make you feel good for awhile, but eventually you become bored of them or realise that you don’t actually want or need them (just like I did with my expensive designer jumper).

This illusion of happiness the media creates is exactly that, an illusion. True happiness can only come from within you, not from the things you buy or own.

If material goods were the key to life long happiness, then surely every wealthy person would have a perfect life where they were always happy and content.

But obviously this is not the case, as there are just as many unhappy rich people as there are unhappy poor people.

Summary

So conclude this first article, just remember that money is necessary for survival because virtually everything we do in our life is affected by it in one way or another.

However do not confuse money with happiness, because that is something money cannot buy. Only you can bring yourself happiness, and it always starts from the inside out.

The more insecure, unhappy or inadequate you feel inside, the more things you will buy in an attempt to make you feel better.

This is an important point and one you should remember, because it is the very reason why so many people are so bad at managing their money.

If everyone in society was happy and content with themselves and their lives, they would buy a lot less than they do now. So just keep that in mind as we continue to talk about money, and your attitudes towards it.