Personal Finance Is Simple: We Fail When Our Money Lacks Purpose

Personal Finance Is Simple: We Fail When Our Money Lacks Purpose

The most basic rules of personal finance are simple and constant. Yet it’s really hard for us to save more than we spend, and the reason may be because we lack a “why”.

Picture: Themeplus

As ClubThrifty points out, motivating yourself by saying “I really need to stick to a budget” won’t get you very far, and seeing savings add up can only motivate for so long. The constant motivator, however, that can keep you on the right financial track for the long run is the question “why” — why do you want to save money? to become wealthy?

The strength of your “why” is what’s going to propel you to ever greater heights. “I need to budget so that I can pay the electric bill.” Not very motivating is it? “I need to get on a budget in order to save enough money so that my children can have a nicer home, in a safer neighbourhood, with a better school system.” Now that’s something that can drive you.

The question of why can be used in pretty much anything that you want to accomplish in life. Perhaps you’ve decided that you are going to start going to the gym? Why? The strength of your why will determine how long you’ll commit to your new project. If it is just to look good for summer, that is all you will get. If you’ve committed to living a healthier, longer life, you’ve made a much stronger commitment.

Give your money a purpose and think of your long-term life goals when creating your budget. This definitely has worked for me. The times when I’ve been most careful with spending and saving were before meaningful events like buying a house and preparing for a trip. The key is to always have a bigger purpose in mind.

It’s a Question of “Why” [ClubThrifty]

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