Why should I learn about personal finance?

Hands up who wants to learn about personal finance? Kinda pointless question as I’m sure you’re ALL putting your hands up. And by all, I meant our three readers. If we count both our mothers.

In all seriousness, surveys like THIS one, show that at least half of us struggle explaining concepts like interest and pensions. And this is hardly surprising given the lack of education we get on these topics at school.

But at least we studied fractions for weeks on end. To be fair that enabled me to cut a pizza thus ensuring our kids don’t have meltdowns about how unfair life is. That’s not strictly true. There are still many meltdowns about the exact size, how many pieces of pineapple someone else got and the wrong colour of plate.

I had a conversation a few months ago with a close friend about a poor financial decision he was about to make. I’ve since been thinking about what resources to recommend to friends to help them learn about personal finance and making money decisions. The first step is always learning.

Learning is like rowing upstream: not to advance is to drop back.

Chinese proverb

I feel like sleeping

This is true in so many areas, and not just personal finance. But for some reason, even when we know that we can improve our situation by learning, we somehow seem wired to continue with the sub-optimal status quo.

I see this in my own life. One of my hopes for our sabbatical year was to sleep better. Every reliable study confirms how important sleep is for our physical health and mental well being. So I bought the highly recommended Sleep Smarter by Shawn Stevenson.

But have I read it? NO. Its been sitting beside my bed (kind of ironic) for weeks. I did read the introduction – which confirmed that my sleep will improve IF I read the book and IF I take action on what I learn. Part of the problem for me is accountability. I’m very good at completing tasks that other people rely on me for – which is why I think I was a great employee. But not so good at completing tasks that are important to just me personally.

The thing, sleep should not just be important to me personally. I know I am a better parent when I’m well rested. I’m more patient. I want to hang out and play games with our kids. I want to laugh with them and let them do stupid things look after them responsibly when Mrs C leaves me in charge. And I’m a much better husband. I’m more thoughtful, less selfish. In summary, more sleep makes me a better version of myself.

Hopefully this public accountability (please feel free to chase me about this in the comments) will lead to me reading the book and taking action on what I learn.

Money matters

I think that our financial health is often down-played as less important than other facets of our lives. The truth is that it’s completely intertwined. Our relationships with our significant others are central to our lives – but disagreements about money are a leading cause of divorce and family conflicts. Mental health is deteriorating in the Western world – but how many of those problems are caused by debt and poor financial situations. Parents and kids spend less time with each other than at any time in history – how much of that is driven by both parents having to work longer hours to pay for inflated lifestyles.

In the last few months we’ve had half a dozen friends reach out to learn about personal finance. For those that are counting, that’s about 3/4 of our friends – who said fractions weren’t useful? We spoke with these friends about a variety of topics, including investing, cutting costs, and living abroad.

We are not masters of money and have lots more to learn about personal finance. Regardless, personal finance is ‘personal’, and it’s up to all of us to make the right decisions based on our individual circumstances.

If we want to improve our financial lives, then we have to do something differently from what we are doing today.

If you repeat today what you did yesterday, you should not be surprised when the outcome is exactly the same as yesterday’s.

What can I do to learn about personal finance?

I think there are a couple of things we can do. Firstly, reach out to people in our social circles who seem to have a good handle on personal finance. Ask to meet with them and chat through what they do.

Hint – the people driving the flashy cars and living in the mansions may not the people you should reach out to!

You can email us on cuttingchaos@gmail.com if you have situations you would like us to write about.

Secondly, make a decision to improve your financial education. That can be through reading blogs, listening to podcasts or taking personal finance courses. The materials that are appropriate for you will depend on your personal circumstances.

Here are a couple of resources I’d recommend if you want to dive a bit deeper into the topic.

Financial Independence 101 course

The course was created by the ChooseFI Foundation. The course is free and has 12 sessions. It’s in video format which is great since I have some friends who tell me that “they don’t read”. Which is why I feel safe insulting them here!

Rebel Finance course

Alan and Katie Donegan are two of the most enthusiastic and awesome people you’ll meet. They created the free Rebel Finance course to help ordinary people take control of their finances.

The next 10 week session starts on 26th April 2021 and consists of weekly interactive zoom calls that give you the platform to ask questions. Further details here.

I’m always on the look out for other resources to recommend to those looking to learn about personal finance. So do let me know if you come across any great resources.

The more that you read, the more things you will know. The more that you learn, the more places you’ll go.

Dr. Seuss