Personal finance remains one of the most misunderstood subjects that significantly impact every adult's daily life. "The average American has $51,900 worth of debt across mortgage loans, home equity lines of credit, auto loans, credit card debt, student loan debt, and other debts like personal loans." Sites like CNBC.com, however, put the total amount owed for the average family living in America closer to $90,460.
A quick internet search shows that, depending on the site, up to 71% of adults worry about where the money will come from to feed their family and still pay monthly bills. The food versus bills is unpleasant to read about, even worse to be in, yet many live this daily. If this sounds all too familiar, then money management is probably not understood, yet all can have financial freedom at every income level.
For young adults and college students, the topic of money management can feel overwhelming. The education books that cover this topic can be dry and not fun to read or understand. Money management for beginners covers taxes, loans, saving for the future, and budgeting. However, when money management or saving money comes up, average college students think this is a topic for another day, and that day never comes. An now, as adults living paycheck to paycheck, financial freedom seems like a pipe dream.
Many education and finance books have been written for beginners, for women, for young adults, for college students. Each has merit as each of these subjects has specific information paramount for understanding money management, saving money for emergencies, and financial freedom. Understanding each phase that one goes through in life and how one is related to saving money will lead to more financial freedom as one moves through life from young adult to retirement.
Books specifically for beginners are helpful in that the reader is given a basic understanding of how to budges and where the money brought in is going. How and why each area of money management affects life is a bigger topic but worth looking into as the budgeting skills are mastered.
Money management for women is only slightly different from that of a man; however, many books for women are written in such a way as to “dumb down” the information; these are not always the best. Yet, books about women's financial freedom that present the information without the “dumbing down” effect are worth reading. Women do have different needs than men, and sensitivity to this is much appreciated by many women.
Many young adults and college students alike have asked: what is so important about studying and understanding personal finance? The answer comes in many forms and starts with knowing where the money made at work is going. Next is knowing how to save for big purchases and when to take out a loan. How much that loan is really going to cost, and is that cost worth making the purchase now versus saving up and buying with cash.
To make a personal budget and stick with and work at being financially responsible takes discipline. Yes, understanding how taxes affect the bottom line and how that rise will take more money away in the end, with payroll and income tax, is critical, but more important than that is knowing where every bit of money is going; that is what a budget will do.
The skill of money management has the ability to make a life without financial worry or a life of constant fear. To understand and master the skill of money management and find financial freedom, everyone has to make the hard choice of living within their means.
Money management is a skill and must be practiced. That being said, having a place to practice is important. Maybe the development of an education program that is more understandable and has a hands-on, real-world feel, so young adults can experience how money management works. The endless lists and information does not seem to be working.
With so many adults juggling the take-home pay (net income): has the education books available, or the system of teaching this information failed? Finding who to blame is not necessarily going to solve the problem, and the answer will not make the situation better. What needs to be done is to do better by educating and making the information more understandable. Also, the education of the young (10 to 12-year-olds), starting younger may be a key to better-prepared adults.
Money management can be overwhelming and hard to understand; however, obtaining financial freedom comes with a dedication to the study and understanding personal and money management. Many education books exist on money management and personal finances, so find the book that is easy to understand, fits the needs at hand, and get started.