When I think about what we learn at school, I am not surprise that we have so many problems handling our personal finance. You will actually speak about taboo subject such as sex for hours, but they will never hit real taboos… such as personal finance. Same thing at home, you will probably find out about your parent sexual habits before you find out how they make and how much they have in their investment portfolio!
I recently read a study done by BMO relating the Canadians difficulties and dissatisfaction managing their personal finance. In fact, the study revealed that 46% Canadians are not comfortable to speak about personal finance and 53% regret not being able to managed them more closely. This proportion drops to 35% for family making more than $100,000 a year.
71% of them think they need help to manage their personal finance. While those statistics are disastrous as a modern society, they are good news for all the financial planners and PF bloggers 😀
I think the major problem lies within the fact that talking about finance (46% of Canadians claim it is taboo in their family) is more taboo than religion (34%) and politics (20%). Maybe it is because people are afraid to find out that they are financially worst than their neighbor? Or they simply don’t want to face the truth about their financial situation? Or they are aware and they fell ashamed?
As it is the case for any other taboo, talking about personal finance with people around you will put an end to this madness and probably an end to most of your financial problems! I am not saying that you should listen to John Do’s opinion about how to manage your debt, but if you share experiences within your friends and family, you will definitely find ways to optimize your financial situation.
I will never say it enough; sharing your financial experience with your kids will definitely help them managing their own finance when they grow up. Frugal Dad shared one of his tricks to explain his 8 year-old girl the power of compounding interest. The most valuable heritage you could leave to your children is to show them how to handle money.
You might find it funny but one of the biggest lesson I learned from my parents is when my father had to declare bankruptcy when I was 15. We were living the good life (actually the very good life) for the past five years and then, all of a sudden, we were forced to move in a small “cage”. I only had $100 remaining from my summer job and I decided to use it to buy posters in order to decorate my new 8’X8’ room.
This is when I realized that overconsumption will lead you to financial nightmares. It doesn’t matter if you can afford the monthly payment or if you can make the minimum payment on your credit card. If you don’t have the ability to pay off your debts or to save money on a regular basis, you will not get out of your hole alive!
I was lucky enough that my parents told me the truth about their bankruptcy. They were honest and didn’t try to hide that they had to borrow from friends and family members to eat at one point.
Because of their hard work, this is now only a good story to be told since they are now in a good financial situation again. Since I learned from their mistakes, I won’t have to make them to understand how to manage my own money. This is why it is so important to share your good and bad financial experience with your children.
I guess this is probably why finance blogs are getting more and more popular. As a financial planner and a PF bloggers, I can’t be more happy 😉 I am curious to know if you are talking about your financial situation with family, friends or colleagues?
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