The phrase “personal finances” can be very deceiving.
Many people take it literally and feel personally attacked when others give them money advice.
What you may not realize is, your financial choices, whether good or bad, affect more people than just you.
Even if you’re a young single person with no kids, your personal choices still have a ripple affect on the people you care about.
How it affects me
When my family asked what I wanted for my birthday, I said “I don’t want any gifts, let’s just spend a nice girls day out”.
And I truly meant it. This year I want to spend my money and time building memories and creating wonderful experiences with my friends and family.
I know everyone is on a budget these days, and money is tight. I feel it too, and I’m working fervently to become debt free this year.
So I understand birthdays, outings and gifts are not as feasible as they used to be. That’s why I wanted to take the pressure off and just spend the day out and about, with my sisters and a few girlfriends.
As it turns out, some of them won’t be able to make it, because they are so broke they can’t even afford to eat lunch with us at Subway for $5.
They have known about this birthday outing for weeks, and yet continued to make bad financial choices, that are now affecting my life.
How it affects your peers
My friends and sister’s mismanagement of money has cost me something I was really excited about.
While they can make it up to me later, it reminds me that no matter how disciplined I am with my finances, it doesn’t mean other people’s bad choices won’t boil over onto me.
If the recent economic situation has taught us anything, it’s that we are all interconnected with each other. Don’t fool yourself and think your mistakes only affect you.
If someone commits insurance fraud it makes everyone’s insurance premiums rise. If someone takes out a loan they can’t afford then defaults on it, it affects everyone.
How it affects your job
When you’re stressed out and making bad financial decisions, your job and coworkers will suffer too. If you interact with customers on a daily basis, they will feel the strain as well.
No one wants to hire a person who lives inside their own little world with no regard to others. Maybe that’s why you’re not very good at your job!
You don’t think what you do, what you feel and what you say affects other people. But it does.
If you want your boss to like you and to get along with your co-workers, start by handling your money better. Maybe you can treat them to coffee occasionally.
How it affects your children
Financial choices normally affect children in one of two ways.
- Immediately
- In the future
Immediate effects. If your kids are small, they only notice the financial tension and distress within the family. They may not know exactly what it is, but you’re just stupid if you don’t think they notice something.
No child cares about material possessions, if it creates mounds of debt and loads of financial stress to go along with it. They would much rather spend time with their parents, instead of never seeing them because they are at work.
Future effects. Your kids will notice even more when they’re older.The success or failure of their future is determined by your example and what you (inadvertently) teach them as they grow up.
I don’t promote the “victim” type of thinking, and we all have the power to change the future set up by our parents. But it doesn’t mean it won’t be difficult.
Learning a new way of thinking and completely making a 180, takes courage and lots of dedication.
Putting in the work now to change your family tree, will keep you children from having to do it later.
How it affects your significant other
This is by far the one person who feels the brunt of your decisions the most, your significant other. If you aren’t working on your financial plan together and constantly updating each other, you’re probably having money issues.
I’m not saying you always need full disclosure and no privacy, but at a certain point, you and your partner need to get on the same page. No more lying, hiding shopping bags and throwing out bank statements.
Financial infidelity is nearly as powerful as sexual infidelity and both of them create a massive breaches in trust. Your best solution is to come clean now and start fresh.
Be smart and wake up to the fact that people depend on you, just like you depend on them.
Your decisions about money, don’t just affect you!
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