Financial amnesia 1: When we really don’t know what we spent our money on and how we spent it so quickly.
If you don’t actively keep track of your finances, there is often a feeling that your money has disappeared quickly; sometimes you even wonder if you lost some of the money somewhere, because it is not possible that you have already spent so much… And when you start keeping track, you realize that it is possible and you can clearly see what your money was spent on.
Many people find it difficult to deal with their finances, and especially their expenses, in writing (on paper, in a spreadsheet, in a mobile application).
When someone spends as much as he/she earns, and even has debts and loans, then keeping track of expenses and income and seeing “0” as the end result can seem burdensome.
But if the result so far has been “0”, then even a small improvement will be significant. First of all, believe that you CAN improve your finances and try to make minor changes. For example, start to keep track of your income and expenses.
Financial amnesia 2: When we actually know what we spent our money on, but we choose to forget and not mention certain income and expenses.
Most often, these expenses and income are related. For the amount of income we “forget” we buy something we “forget”. 😉
There are two main reasons why we have “conscious” financial amnesia:
- due to disagreements with loved ones about spending money
- due to feelings of guilt when we buy some things.
Disagreements with loved ones about spending money
One of the reasons for “financial amnesia” is a disagreement within a family (especially between couples and spouses) about spending money. Not keeping track of expenses and income always leaves some room for ” manoeuvre” – to spend money on something that the other party would not agree with… The importance of this topic was mentioned in the article “Money – Most Common Reason for Divorce”, which was published in the Blic newspaper in 2009.
As stated in the article, “85 percent of all divorced couples eventually admitted that finances were the main cause of disagreements and problems.”… “when we say that money is the cause of disagreements in marriage, it refers more to the disagreement between the spouses about spending money.”
It is further stated that “over half of the surveyed women in the research say that they do not know what their spouses’ monthly income is. As many as 40 percent of them believe that their husbands have “black funds”, while one in four believes that their spouses spend more money than they report. Thus, secret funds are most often spent on the extended family, alcohol and other women. The wives who took part in the research say that every attempt to talk about money ended in an argument.”
In case of a substantial disagreement over what to spend money on, there are 4 options:
- trying to talk and find a mutually acceptable solution;
- spending money only on those things that a close person agrees with, and thus suppressing your own needs and desires;
- spending in secret (someone will secretly help financially their parents, sister, brother, someone will go to a betting shop);
- ending that relationship.
How to spend / buy without feeling guilty
Most of us know the feeling of guilt when we buy something we don’t need (so much). Maybe it’s another bag, a short trip, another decoration / tool for the house, a car accessory or a “cool” gadget.
The most important thing you can do for yourself and your finances is to be completely honest with yourself – what you care about the most (to buy, and in life in general). What are your goals, what are the priorities of those goals? What is most important to you. Not what others say you “should” do, but what your being wants, what your feelings tell you you need.
We are always expected to decide what to buy first and what to buy later (or not to buy at all) in line with our possibilities. Suppose you want to have some minimal savings – a golden reserve, and yet you like to travel and take courses. At the end of a month you have 300 euros left. You see that the trip you wanted to go on is at a discount. You also see that the course you planned to take is open for applications.
Will you put the “remaining” 300 euros in your golden reserve, go on a trip or take a course? In each of these scenarios, 1 of your goals will be met and 2 will still be on hold. Take your time and imagine all three scenarios and how you would feel about each of them in the event they came true.
If you do this before buying something (visualization of buying – you have what you want and how you feel afterwards), you will find that there is no feeling of guilt because you consciously made a choice and made the decision that meant to YOU the most at the time. At the same time, it will no longer be a problem for you to write down what you spent your money on, but you will be happy about it – the money is directed towards achieving something you wanted.
Finances are not a goal, they are a means to an end
One may also ask whether finances are really the cause of many frustrations and disagreements, or the cause lies in uncoordinated priorities and desires. Based on the above, you can see how important it is to know what we want, what our priorities are, and then to talk about it openly and on time with our loved ones.
How to successfully manage personal finances?
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