Finance

Financial success means something different to every person. Some want to have enough money to pay the rent, pay their mortgage and just get by, while others seek to acquire a huge estate. You may want to be a millionaire by age 30, however most people just want to have a comfortable lifestyle. Few people reach financial success without restraining their current spending.

Becoming active in savings for future consumption is a habit everyone needs to get into. According to the book “Personal Finance,” by E. Thomas Garman, from the Virginia Polytechnic Institute and State University, lifetime financial goals generally cover 1.) Maximizing Earnings and Wealth 2.) Practicing Efficient Consumption 3.) Finding Life Satisfaction 4.) Reaching Financial Security 5.) Accumulating Wealth for Retirement and an Estate.

Maximizing Earnings and Wealth

Having an abundance of money and valuable assets requires one fundamental principal: spending less than you earn. Budgeting and planning for this is a top priority. Another goal then needs to be focused on maximizing your earnings. You can accomplish that through employment, entrepreneurship and/or investing. How you do this is entirely up to you and unique to your particular interests and passions.

Practicing Efficient Consumption

We use money either for consuming or saving. Efficient consumption comes from practicing good financial skills, like keeping good financial records, avoiding impulse spending, using credit wisely and keeping living expenses down. Failing to do this is often a result of carelessly spending money on non-essentials and ignoring monthly obligations.

Finding Life Satisfaction

Your satisfaction with life may come from being debt free, owning a home, going on vacations, educating your children, living well in retirement and leaving an inheritance for your children. All of these goals can be achieved through a variety of career paths and every day investment decisions. Financial success offers you a better quality of life whether you want to live well or give your money away.

Reaching Financial Security

Financial security is not about having earned a specific amount of money. It is more in the comfortable feeling you gain when your resources will adequately fill any needs you might have and most of your wants. Free from doubt, anxiety or fear about money is a wonderful place to be. You will need to have a career with potential, an adequate emergency fund, investments an estate plan and a will. Setting short term and long term goals is absolutely essential to achieving financial security.

Accumulating Wealth for Retirement and an Estate

Many financial goals are set to make sure that retirement is a time of life that is comfortable and enjoyable. Seeing this goal as a young adult is really a precious gift. The value of time in savings and investing is really priceless. Anyone who can see that from the start of their careers is on the right course to achieving financial security.

Personal finance articles are written to help people gain better information about helping themselves improve their financial condition, yet the people who need this information the most often avoid it altogether. Why?

Reason #1 – Lacking Belief

The mindset of a person that is struggling financially is negative. Plain and simply, they do not believe they have the power to change their lives. They then convince themselves that nothing is going to help so why look for help.

Reason #2 – Firm Belief They Are Doing Everything Right

Along with lacking belief, people think that there is nothing more they could possible do. To avoid feeling even worse about themselves, they then avoid learning more.

Reason #3 – They See No Reward In Learning New Strategies

People respond well when given rewards. If they feel they are failing already, then reading more makes them feel worse. There is no reward in their mind for learning new strategies.

Reason #4 – Lack of Establishing A Habit Of Reading

In the book, “The Power of Habit” by Charles Duhigg, award-winning New York Times business reporter, we learn that in order to establish a daily habit, people need to experience a reward. To establish a habit, the desired activity needs to be repeated regularly and occur subconsciously. So the habit of reading may not be one of the goals of someone having financial difficulty.

Reason #5 – A Desire To Feel Smart

Human beings seem to get an internal reward that feels good if they are given a task to do that challenges them and makes them feel “smart.” This intrinsic reward sets the stage for many life decisions. People having financial difficulty are struggling on so many levels, that they actually need more experiences that validate their need to feel smart. Reading about personal finance reminds them that they are lacking in this area and creates a negative reward.

So now that we know why people avoid reading personal finance articles, how do personal finance writers get more readers for their articles? We will respond to that question by referring to the top reasons people avoid this behavior. Here are five suggestions to get writers past the objections people use.

Solution # 1 – Provide Examples of Success

To combat the lack of belief obstacle, let’s provide some examples of people who fought through their challenges and came out winning. Dave Ramsey, a popular personal finance writer, had a portfolio worth $4 million dollars by the age of 26. He purchased real estate with money borrowed from one bank and that bank sold their holdings to another bank. The Tax Reform Act of 1986 ended up affecting one of his creditors who called a real estate loan due in 90 days. The only relief he could get was to declare bankruptcy. From that point on, he was determined to help other people with their finances and encourages people to get to the debt free stage and stay that way. He has enjoyed financial success because of his struggles.

Solution # 2 – Provide A Disruption In Thinking

To help people who think that they are doing everything right, they need to experience a “disruption” in their thinking patterns. An interesting study of a product that most people have now heard of, Proctor and Gamble’s air deodorizer Fabreeze, proved that people don’t often smell bad odors in their own houses. Why? Because they become so used to odors in their own homes that they were no longer offensive. They couldn’t smell it. What marketers did when they discovered that was to find a new reward for using the product. They studied women (lots of women) who cleaned their houses. After the cleaning was done, women smiled as they looked at their work. So the marketing department focused on this particular reward: The completion of the task and the finishing touches that a spray of Fabreeze could provide. Their product started hitting record sales levels. Remind people of what they could be experiencing with added attention to personal finance.

Solution # 3 – Help People See The Rewards Of Saving

Saving money is the toughest challenge we face. Whether rich or poor, saving money is mandatory. Without that chunk of money, people have no ability to make large purchases or to have a cushion to rely on for emergencies. Savings that are automatic and a predetermined percentage of monthly income seems to work for a lot of people.

Solution #4 – Develop Habits of Reading About Personal Finance

Personal finance can be dull, boring or even put some people to sleep. Why? Because people want to think they are doing their best or that they already know it all. They are not looking for the next hill to climb. Find someone who is a good mentor and then follow their strategies.

Solution #5 – Help People Feel Smart

Recognize all the decisions that helped them get this far in life. Help them plan new strategies and dump ones they have been burned on. There are always horror stories about people who make decent money, yet have no savings or find themselves spending more than they make. Just hearing some of these stories can be motivational or at least entertaining.

Changing your thinking patterns and setting new goals can put you one step closer to living a richer life. Start today by doing one small thing differently. Your success is up to you.