The “Personal” in Personal Finance

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Yesterday while I was writing for my blog, this question about the “personal” element in the personal finance suddenly popped into my mind.  What is the implication of the word “personal” in personal finance?


The title of my blog is “How healthy is your personal finance?”


When I started the blog, my main concern was the “healthy” and “finance”.  I did not really give serious thought to the “personal” element of the personal finance.


Now that I have time to ponder, I think the operative word “personal” in personal finance is more important.  In fact, the word “personal” reminds us that personal finance is an individual responsibility.


When you get into financial trouble, you cannot blame others for duping you.  You have to blame yourself for wanting to believe the person who wants to dupe you.  That is the “personal” in personal finance.


Personal finance is more than knowing how to make money, save money, invest money.  The word “personal” in personal finance tells you that you, as an individual, are the most important factor in the success or failure of your personal finance management.


What is personal finance to you?  Personal finance is not about formula.  Personal finance is not about hearing a hot investment tip, and acting on it.  Personal finance is all about how you control your emotions when your money is concerned.


Are you are person who cannot control your desire to spend money?  Are you a person prone to impulse spending?  If yes, you fail the “personal” part of personal finance.  No matter how much money you can make, you will find it hard to have a healthy personal finance.


You have to learn to control your desires to spend money unwisely.  You have to control the tendency to trust others blindly.  When your brain tells you that this is too good to be true, you have to control the greed of the heart to make quick money.


Quick money is possible, but not in your control.  You cannot control when you will strike the lottery.  The chance to make quick money should not even enter into the equation when you do financial planning.


Do not even think about making quick money.  Do not even have the desire of making quick money.  If you can do that, you are showing the ability to control and manage your personal finance.


Whether you become bankrupt or become a millionaire, you have to assume responsibility for your action.  This is the “personal” factor in the personal finance management.


When you listen to the advice of your banker, you have to bear the responsibility of your action.  You can become poorer or richer as the result of your action.  Even if you do not really understand the logic, and you decide to go ahead and buy the hot stock or sell the hot stock, you have to bear the consequences.  That is the “personal” factor in personal finance.


It is your duty to know where and when your money comes in.  It is your duty to control your spending, and make use of your money wisely.  It is your duty to educate yourself sufficiently to make educated guesses.  This is what personal finance is all about.


It is your duty to learn about making money, and try for yourself.  You should not believe everything that others say.  The word “personal” in personal finance means that you should try and find out for yourself.


When someone tells you making three or five thousands a week is not possible, you should not believe everything he says.  What he means is that he is not able to make three or five thousands a week, there are many others who can make three or five thousands a week, that is why you see many millionaires and billionaires around.


Personal finance management means you have to try out for yourself.  Even if you fail a hundred times, and succeed only once, that one time can make you rich beyond your wildest dream.


The purpose of personal finance management is to know yourself, your strengths and weaknesses in personal finance management, your current financial needs and wants.  Personal finance also means that you are in charge of making all financial decisions.  Even if you have accountant to help you, even if you have family members who are better at money management, it is still your duty to make decision for your personal finance.


They can help you in managing your personal finance, but they cannot help you make investment or spending decision.


Ultimately, your personal finance is truly personal to you.  Even though you make use of personal finance software to manage your personal finance, you have to make all decisions.  You have to customize all financial advices to create a truly personal finance plan, a truly yours personal finance.

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