According to a study from the Pew Research Center, about half of adults living in America, say that they know a great deal, or a fair amount, about personal finances.
Another 33% of Americans say that they have some knowledge about personal finance, while 13% say they don’t know much or nothing at all.
This study is interesting to me, in that, it points out how Americans think about debt by generation and by race.
To be honest, studies for me, for the most part, leave me with so many more questions that can never be answered.
Though they may reveal the total people being surveyed, their race, and their age, and maybe their income, we don’t know one single thing about their backgrounds or the history of the people being surveyed.
Though I can appreciate what these studies are attempting to accomplish, there is not much that anyone can take away from these types of studies other than theories and opinions.
Personal finance, is just that ‘personal’, and how a person handles their money (their finances) is dependent on who they are, how much they earn, their expenses, are they married, are they single, do they have children, how many children, do they have a mortgage or are they renting, and so many other factors.
For example, a person can be single and renting an apartment, and they might believe that they are extremely knowledgeable about finances because they only have to create a financial plan for one person… themselves.
Then you have a married couple with three children, a mortgage, education, insurance, college savings, and so many other things to think about, they may find themselves overwhelmed, yet, they may have the same or more knowledge about finance than the single person.
There is no way that any study can take into account all of the many variables for the study to be at all useful.
Here is My Bottom Line:
Personal finance does not have to be complicated or difficult, in fact, it can start with simple math, regardless of age, race, or income status.
All it takes is having a clear picture of knowing how much you earn from all of your sources (your total household income), and then, knowing how much you spend (your total household expenses), such as credit cards, subscriptions, education, streaming services, utilities, food, cell phone, gas for your car, rent, etc.
By writing your numbers on paper, and subtracting your Total Household Expenses from your Total Household Income, you can go a long way to knowing where your money is going.
By putting all of this in writing, you may discover that you are paying too much for an item or a service, or worse yet, you might be surprised to discover that you are paying for an item or a service that you don’t actually use.
If you happen to discover an item or a service that you don’t actually use, or one that you can do without, you can then cancel the item or service and then use that money to pay down your credit cards or your car loan.
Once you have gotten this far, you can then determine a financial strategy for investing the money that you have left over (DPI – Disposable Personal Income) to stimulate personal financial growth and begin to build financial wealth.
Starting to understand personal finance is really that simple.
A large part of a personal financial strategy for many people is to be patient, doing without certain things, and maybe, a part time job.
Most people however, do not have any desire to be patient, or refuse to do without, and might say that they have no time for a part time job.
All I can say to that is this: you are free to do what you want to do, but for every action or non-action, there is a consequence or a reward, what you receive depends on what you do.
Patience, doing without, and a part time job, are all just part of a financial strategy, and if you do it right, the rewards can be well worth it.
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