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Tuesday, October 15, 2013

The Consequences of Showing Off With Expensive Things, Which You Cannot Afford

I've read an interesting article on The Star not too long ago regarding what happens when you show-off with expensive things, but can't afford it and of course it makes sense that the consequences of showing off with expensive things which you cannot afford is debt; and in some of the more severe cases one might actually declared a bankrupt because of this.

I am sharing the following article to raise awareness among the youngsters who are not having good sense of financial management; but at the same time placing too much importance on appearing "rich" rather than really rich in net worth although the article applies to almost everyone.
 
The article is as follows:-


Placing too much importance on appearing rich can affect one’s net worth. One may want to delay self-gratification in order to build a strong financial foundation

I ONCE asked someone who looked like a million dollars on the outside but was totally broke, this question:“Is your self-worth destroying your net worth?”

Some of us have defined our self-esteem from the external things - the car we drive, the handbags we use, even the pen we write with. We want to be seen as “rich and successful” but we are secretly struggling with our finances.

Even if we are not broke, some of us have placed the external outlook of ‘looking rich’ as more important than the milestones in our lives, for instance ensuring a secure retirement or building a strong net worth that can last throughout our lifetime.
Wanting to ‘keep up with the Joneses’ maybe due to a lack of self-esteem. Those who buy things they can’t afford sense a boost in their self-confidence by having these things, particularly in the public.

Having luxurious items is fine as long as you know your net worth can sustain it and you do have a financial plan in place.

However, if it is draining your pockets, then you need to wake up and change before it is too late.
Stop placing so much importance on demonstrating socio-economic superiority.

Rather, focus on owning a strong financial foundation that can sufficiently meet your life’s goals.

Delay instant urges to gratify your self-image until you are sure your net worth says you can afford it.

If you do indeed have a self-worth issue, fulfill the void with family and meaningful relationships, a heightened appreciation for self, charitable works or even spirituality for some.

There is nothing wrong looking ‘less rich’ than others as long as you know that happiness is sourced internally and not externally.
After all, money does not buy you happiness but managing it well can get you there.

I urge you to ask your self this question now: “Which is more important: your self-worth or your net worth?”

Tuesday, October 8, 2013

Money Can't Buy Me Love

It is so coincidence that just the other day I was chatting with a friend regarding financial management in the family and then yesterday The Star posted something similar to this - Money Can't Buy Me Love, which talks about financial management or planning in a family that should start as earlier as possible to prevent financial struggles. I found that the article is really interesting given that I agree with most of the points and the fact that there are many relationship which fall apart due to the mismanagement of the family finances. The article is as follows:-



Indeed, love is a many-splendored thing. When we are passionately in love, nothing really matters in the world. But when the romance settles and financial issues start to pile up, can love be thrown out of the window?

MONEY certainly can’t buy us love but it can to some extent, prevent financial struggles.

I have seen many relationships fall apart due to mismanagement of family finances.

Arguments about money can also multiply into other emotional issues.

That is why financial planning must start as early as family planning.

Couples must make time to ensure that money issues do not stand in the way of their relationship and their family goals.

In managing family finances, both partners need to be financially responsible and
accountable.

There are many instances in a marriage that one of the partners takes charge of the finances.

Usually he or she is the one with more financial knowledge and experience, the so called “Finance Minister”of the home, whilst the other partner is left tofocus on other family matters.

This sort of arrangement can be beneficial as different partners focus on different areas in their family life.

However, it is advisable that the financially astute partner shares with his better half what he or she does with the family finances so that his partner is more aware of where the family money goes to and learns to be more financially literate.

This becomes especially important in the unfortunate event where the “Home Finance Minister” passes away first or becomes unable to manage the family funds.

Many couples make the mistake of leaving the family financial matters to solely one partner and the surviving partner becomes “financially incapacitated” due to financial inexperience.

Involving your partner in the family’s finances must stretch beyond just having joint accounts to updating your partner about your loans, retirement plans, insurance policies, wills, and where important documents are kept.

If you hire a financial planner to assist you, make sure your better half is included in most of your discussions.

We have often heard that the love of money is the root of all evils.

Conversely, the lack of it can be so too.

Think about it.