Are you on the road?
Your road to Financial Freedom: Part 1
Financial Freedom: what does this mean to you?
Financial freedom means different things to different people, from not having to worry about the cost of anything, to just being able to cover the bills, even if there is nothing left over. We each have our own understanding of being financially free.
Believe it or not, getting out of debt may just be the easiest part of becoming financially free. The term, “not having to worry” is the more difficult part.
In the post “things I learned from the R1 experiment” I stated that experts tell us that our attitude and money sense are established by age 7. This develops, from seeing our parents dealing with financial matters to our experiences with money as a child.
Suze Orman says that she asks all her clients to think back to their earliest memory of money and identify with it and see how it affects you now as an adult. Suze says that her money memory comes from seeing her father run into his burning business to recover the cash register because all his money was in there. He was badly burned it the incident. Her association to money, therefore, became money is more important than your life.
One of the things that stands out for me is something I learnt from my father who never believed in buying anything on credit. This is a great philosophy but isn’t going to work in a country where you can’t even buy a house without a credit rating and how do you get a credit rating? Easy, by owing some company money!
Many years ago, before we had kids, my husband and I went shopping to buy him a suit. I had paid off my account and had a good credit limit, when we were finished, our shopping was about R100 over my limit but because I didn’t owe anything they would not extend the limit. I had no credit rating!
Was money a taboo subject in your home, growing up? Did your parents argue over money all the time? Did you grow up in a home where money was not an issue? When you got money as a gift, where you allowed to spend it on anything you wanted, or did you have to put it all in the bank, or did your parents advise you to put some away and you could spend the rest?
As a child, were you often told you couldn’t do something, because it was too expensive, or your parents didn’t have the money for it? Were you embarrassed because you had more, or less, money than your friends?
Did your parents discuss money matters openly? Did money cause a fight between your parents? Did you get pocket money and, if you did, did you have to earn it or was it just given to you?
These are factors that affect the way we handle money as adults. So, your job this week is to identify your money memory and examine how it affects your life today. How do you and your partner handle money issues?
Does money burn a hole in your pocket? Do you hold onto your money and barely spend any? Have you gone into debt by spending on your credit card?
Ladies do you hide purchases in the back of your cupboard, so your husband won’t know? Why, did this purchase put you in debt? Do you feel guilty for spending money, even if the new item isn’t expensive?
Next week we will look at how to change our perceptions and set new goals.