By Kellie Cowie
We all have our inherent habits and nuances when it comes to managing money and our personal finances, but have you ever thought about where your beliefs come from and why you manage money the way you do?
Most of us first received money ‘guidance’ from our parents and learnt to spend/save with our pocket money. At the time, the big question was ‘do I spend my $2 now, or do I save it until next week so I can spend $4?’ Our first exposure to banking was the ‘Coming of Age’ Ceremony which came with receiving your shiny new deposit book when you opened a ‘Dollormite’ bank account (do they still do this?). Whatever it was for you and whether you realise it or not, how you manage your money today is a result of your past experiences and influences.
There is no one place where money advice should come from, in fact, we should always aim to educate ourselves from a large range of places to ensure we obtain varying opinions, ideas and viewpoints. The issue comes when we fall into a habit of seeking guidance from the same sources that we used as a 20 year old when we reach our 40’s, because generally the needs and objectives of the 2 age groups are very different. One must constantly assess whether the many sources where we ‘gather’ information from are suitable and serving our current needs.
Gathering information from a variety of sources such as articles, books, blogs, friends, family, peers, financial institutions is great – but remember some information should be taken with a “grain of salt”. With this in mind, here are a few of the benefits and pitfalls of asking our most common sources of information about financial matters:
Parents/Grandparents:
Always a great place to start, but this should not be the only place you seek money guidance from. Your parents are in a very different life stage to you, meaning that what is currently important to you (like making money to buy a property or to invest) is probably not what they are focusing on financially (think retirement, superannuation and downsizing the family home) so unfortunately what is working for them may not suit you or your objectives. What they will be helpful with is that they have been where you are, so they can enlighten you about lessons they learnt along the way.
Friends and Peers:
The thing to remember here, is that they probably aren’t experts themselves - they are simply giving you information about what has or has not worked for them. It is a great place to start, and generally speaking friends and peers are probably in a similar life stage to you, but their information and experiences shouldn’t be the only place that you seek money advice from. Everybody is different and no two people’s money situation is the same, so it is great that it worked for them, but you need to ask yourself whether there is something even better for you, based on your situation.
As an extra check, ask yourself whether that person is in the financial position you want to be in, because modelling someone with bad financial habits will result in similar results for you.
Online Finance websites and Blogs:
This is a great way to remain anonymous whilst finding out the options or for getting general financial information. Always cross check the source of the article and be wary-are they showing product bias and are they accredited/authorised to provide financial information? The internet is a wonderful place to start your research-it’s fast, private and information is abundant. But as you already do, cast a wary eye over everything you read and at the end of the day, it's up to you to sift through the information available and to find the content which is most relevant to you.
Financial Adviser:
The great thing about seeking out an Adviser is that they are experts, who are authorised to give you specific advice by taking into consideration your individual circumstances. Of all the ways to obtain information to help you with your finances, THIS one is the best. Most Advisers will offer you a free initial meeting where you get the opportunity to ask questions whilst they get to know you too. After the initial meeting, if you wish to proceed, they will present you with specific recommendations and guide you through the process of getting your financial affairs in order and ensure you track towards any goals you have set with them. What better way to overcome the complexities in navigating the financial world, but with your own personal Financial Navigator?
Seek information from a variety of sources and no matter who you go to and trust for money advice, always consider whether it is appropriate to you and your situation.
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Comments1
"Good article. Not until I read this article did I realise I am not talking to the right people for advice in my life and asking my close friend (who is also in debt) about my money situation now doesn't seem like the best idea. Thanks "
Simone G 10:08 on 31 May 19