The Simple Truths About Money That It Took Me Years to Learn

There are some truths about money that it takes a while to learn, or at least to truly understand. There’s more to each of these truths than meets the eye, which is why it’s important to think about them. Understanding them will really help you plan your own unique financial journey.

Money Really Doesn’t Buy Happiness

But lack of money can make you miserable. Knowing this can help you organize your finances sensibly, but not waste years of your life chasing monetary success at the expense of all else. Almost everyone I know who is truly happy is in a vocational job that gives them satisfaction during their workday, and pays the bills. Their happiness comes from a combination of enjoying their work, drawing happiness from things that don’t require a huge amount of money, and not having to stress about not having enough money. This can even be seen on a global scale. There’s a reason the happiest countries often have a culture that embraces work/life balance, a less consumerist society, and strong social policies to ease financial stress.

You Need (and Want) Less Than You Think

If you’re a middle-class person in the Western world, you probably spend more on wants than on needs. It’s fine to want, and own nice things if they make you happy. But do they? Why do most minimalists feel so much better after shedding all their stuff? Why are people living in tiny homes often so happy? Why do people buy up half the toy store at Christmas when they know their toddler will spend more time playing with the wrapping? Most of us need less than we think. We also want less than we think. Sounds counter-intuitive but it’s true. The advertising industry wouldn’t need to spend billions of dollars persuading us we want things if we actually did.

It’s Never Too Early to Start

The sooner you start taking an interest in personal finance the better. You have an advantage if your parents taught you the value of money and basic personal finance strategies as a child, but you can give yourself an advantage by self-teaching as a teenager or young adult. A huge amount of well-educated young people never think about money until (at the earliest) they have to start paying off their student loans. Thinking about the financial aspects of college before you even start can affect how you attend college and the degree you choose. Both can have a big impact on long-term finances.

And Rarely Too Late

I’ve seen so many people (especially women) start over, usually after a nasty divorce, in their 50s, often with nothing or next to nothing. It’s hard and it’s stressful, but sometimes, with a little good luck and a lot of good judgment, they’re back on track financially five years later. The later you start to plan your financial future the more effort it will take, but with the right support and advice, it can be done.

You Can’t Personal Finance Your Way Out of Poverty

I say this a lot. The personal finance advice you read online is aimed at the middle-class. It’s hard enough (sometimes impossible) to work your way out of poverty or marry your way out of poverty, but you definitely can’t simply ‘manage money better’ when you genuinely have no money. I used to think personal finance advice was universal. It isn’t. We all need to accept that there is genuine, systemic inequality in this world. Now, I aim my advice on money management at people who actually have money to manage, and try to use my resources to help people who are living in poverty as well.

You Need to Plan Your Finances Around Your Lifestyle

For years I thought my finances dictated my lifestyle, but now I see that it should be the other way around. Decide on the lifestyle you want and plan your finances around it. This can apply to every aspect of life, especially the most important ones. Many people try to be responsible by working out how many children they can afford, but that’s a pretty important thing to allow money to decide for you. Ideally, you’d decide how many children you want and then plan your finances around that. Is it easy to afford the lifestyle you want? Nope. It generally involves not having some things so you can have others. The trick is getting really clear on what you actually want, so the things you choose not to have (whether that’s an expensive car or a child) are the things you didn’t really want anyway, even if society is trying to insist you do.

Personal Finance Is Really Personal

The more I write to address a diverse audience with advice about money, the more I realize there simply is no one-size-fits-all solution. Personal finance is personal. My job is about presenting options and getting people to think about their goals, their finances, and which options will work in their specific situation. Want to pursue FIRE and retire at 35? That’s fine. Want to craft a life where you never retire because you love your work so much? That’s equally fine. In a world with an abundance of options, sometimes the most important step is working out what really matters to you, and planning both your life and your finances around that.

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Karen Banes is a freelance writer specializing in entrepreneurship, parenting and lifestyle. She writes articles, website content, ebooks and the occasional award winning short story. Her work has appeared in a range of publications both online and off, including The Washington Post, Life Info Magazine, Transitions Abroad, Brave New Traveler, Natural Parenting Group, and Copia Magazine. Learn More About Karen