photo by drowning.amanda
My head is in personal finance right now so I’ve been doing a lot of reading, thinking, meeting with folks in the space. It’s made me think about my own situation and whether I feel I’ve done OK or a horrible job. The fact that I’m 31 and not in debt (other than my school loans, which are manageable by common standards) signals to me that I’ve done OK.
Am I a millionaire? No. In fact, I don’t even own a home… which leads me to the point of this post:
What is the biggest money mistake you’ve made in your life? Or another way to phrase this is, What is the biggest money mistake you averted in your life?
I had lunch with a financial advisor in San Francisco last week, who told me that almost across the board a huge differentiator between those who are doing OK with money midlife and those who are staring at some major problems is the car. Did you buy a new BMW as a reward for graduating college? Chances are, that was your first mistake which led you down a path of financial problems into your 30s. Compare these folks to those who skipped the new car and you see an entirely different money situation.
The sad truth to personal finance is that we are all on our own to make decisions and plot out our paths to retirement. Yet we see now as in the case with the mortgage market implosion that when a whole group of people make poor financial decisions it can impact our financial markets and drag the economy down.
Why then do we not see more focus on this in school? Why was I never offered a class on how to plan my retirement? Why is there no resource or call to action for me to take control and understand this myself? Finance is personal, yet our decisions, collectively, can have widespread social ramifications.
It’s time to start a personal finance educational movement. And I don’t mean sharing stock tips with your neighbor over the back fence. I mean, let’s collectively share knowledge with each other about the ramifications of poor decisions, how to spot them, how to climb out of a hole if you’re in one, and how to prepare for the future no matter how much money you make now.