Why Your Painful Money Problems Poison Your Daily Life

Financial education for everyone, please

Yesterday I was on the phone with a good old friend of mine. She was explaining she has sold her house because of a divorce.

In the same week, she offered a new car to her daughter and another one to her son. I thought it was a nice gesture until she told me that she doesn’t have money to pay the capital gains from her home.

At first, I was astonished, not entirely understanding what she just explained to me. I asked her:

Julia, didn’t you put some of that money away for taxes? No. I didn’t know it was so much money- She said. So, I asked: How much did you put aside?

She explained to me she didn’t think about that. So she had no money to pay the capital gains. Now she was hoping their kids, who already have a job, to help her bear that debt.

For some seconds, I couldn’t say anything. How could Julia be so naive?

Then she explained to me another thing. The real estate agent that she first contact to sell her home had an exclusive contract. But she asked for help from another agency. That second agency was the one that found the buyer.

Now she has the first agency also wanting the commission from the seller. So, Julia has to get money to pay the capital gains, to pay the first and the second agency both commissions. And she’s paying a lawyer to solve this tremendous mess, too.

That made me think about how people so often are taken hostage by money. And about Julia, of course, I was sorry for her.

Many people don’t know what to do with their money when they earn it. So, they spend it.

I’ve shifted from bankruptcy to almost financial independence by reading every book about finances. That’s why I believe everyone should have financial education at school.

Education Is the Key To Unlock the World

Why can people think about the distant future when they take out a mortgage loan. But when it comes to preparing any investment or long-term savings, they don’t?

Milan Urosevic shared with us this impressive data:

• 69% of adult Americans have less than $1,000 in a savings account.
• 54.29% of those aged 45–54 have no savings.
• 22% of Americans have less than $5,000 saved for retirement.
• The US has a retirement savings deficit of $4.3 trillion.

Money is challenging to understand. And most people learn to manage it through trial and error. The leading causes of monetary difficulties are misinterpretation and financial illiteracy.

I never understood why countries don’t introduce financial education disciplines to young people from 6 years of age onwards. Are politics afraid of losing power over the general population?

Financial education in schools would revolutionize the quality of life of millions of families. And I still fight in my mind why financial education doesn’t take place in the modern days?

Financial education, in the first place, would change the paradigms of the general population.

Money can stretch and shrink, and it does so many times throughout our lives. We can make the most of the money and try to produce more with less vital energy.

Many of the people we know are accommodating. We look around our workplace and find a lot of people in that position.

We usually accommodate the routine from 9 to 5 until 65 years old. We don’t question it. We replicate from those who do the same from generations.

Balance Is Not Something You Find, Is Something Your Create

First of all, if we have forty-five years of active life, we might as well use that time to do something we like. The most financially successful people define their goals very well and never deviate.

And you don’t have to be a businesswoman or businessman.

In his most successful book Rich Dad Poor Dad, Robert Kiyosaki categorized four ways to produce income. As an employee, self-employed, business owner, or an investor.

It is possible to earn a lot of money in any of these categories. Example: Will Smith (employee), Warren Buffett (investor), and Bill Gates (business owner).

All we need is balance. And real wealth is not financial.

Health, family, money, and hobbies complete the balance. And it’s important to realize that real wealth is not financial and goes far beyond money. When we balance our economic, relational, psychological, physical, and spiritual lives, only then are we complete.

Balance is essential.

Julia's story is one of the thousands of examples not to follow.

The first opportunity she had to balance her finance department, she failed. So, the imbalance has increased.

This imbalance will have a brutal psychological influence. Also affecting her emotional, physical and spiritual life.

The ironic thing is that even without the educational system, you have books. So, it’s not a dead end.

With a free library card, you can borrow ten different books about financial education. It’s free. But even so, people don’t do it.

They assume jargon as absolute truths and go on with their lives. They return to their record of indignant. Not understanding why money comes as a problem from time to time.

Unfortunately, it’s a vicious cycle. And it affects millions of families. Surprisingly, no one seems to have worried about that situation yet.

Final Thoughts

Yesterday I talked with Julia. I tried to explain to her what she did wrong. I try to do it in different ways, simple ways. But I think she didn’t understand. She just repeatedly said she was forced to talk with her son and daughter to help her.

When Julia had the money in her pocket, she thought she was helping their children, but she wasn’t. Now, her son and daughter are working, trying to start their independent life. And they have to go into debt to pay for their mother’s bad decisions.

Many times this kind of episode is enough to break out family relationships. To break out the balance. Financial illiteracy transforms so many times healthy families into a real nightmare.

I hope Julia and her children reach a good base of understanding. Yet, the result can be catastrophic. And out of nowhere, money can destroy a family relationship.

Underestimate the importance of financial education it’s almost like disregarding the family welfare of an entire society. But it seems to me that not even policymakers have that notion. Even they, the holders of power, are victims of this financial illiteracy.

One day, who knows, I will hear a political leader putting financial education as the number one priority on his political agenda. And explaining to his citizens how they can defend themselves from ignorance.

If the consequences of poor financial education are well explained to citizens, this politician wins easily.

Why?

All families want more than anything, the much-desired balance.

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This article is for informational and entertainment purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.