Wednesday, June 12, 2013

Not Because You Are An Accounting Graduate, It Does Not Mean You Are Wiser

It was an endless battle of wit whether to jot my expenses down or just let it happen and forget in total
photo credit:
oblivion. My happy-go-lucky self says to simply ignore it. My responsible and logical goddess wants to keep it documented. So, how do I go about this?

Not so long time ago, a friend introduced me to books of Robert Kiyosaki and of T.Harv Eker. Then, he invited me to attend financial education classes. Those series of life-changing events brought me some realizations and lead me to where I am now. One of those realizations was the recognition of how important financial awareness is. Second, is the importance of taking control of my finances and my life. Let's focus on these two for now.

In the past, I was not that concern of my financial future. Looking back, it seems I was just living and working to survive before I get the next paycheck. I was dragging myself to work every night because I was led to think that I have to so I can pay my bills and buy myself Starbucks coffee every day. Despite of a Nice pay, I never had savings and no investment. My net worth was 0. Every time I tried to think where my money goes, I thought it just went to my basic needs and my monthly payables. It was not an educated guess of course because I do not have a basis--I never keep record of my finances.

Financial Awareness

How aware are you with your financial status? How much do you spend every month? How much do you save? In case you lose your job right now, how long will you be able to live comfortably? What's your financial goal?--These are just some of the questions that tested my financial awareness. If I had to grade myself, I would have given myself an F. Being an accounting graduate does not mean you are any wiser when it comes to money. In school, we were taught how to be an accountant for other's businesses but not to manage our personal finance.

Financial awareness is not just knowing that you will be receiving your salary on the 15th and 30th, and you will be spending this and that tomorrow and next week. It is beyond the budgeting and the cash in and out.

Identifying your old and deep-rooted beliefs about money is critical to financial awareness. It explains why we look at money the way we do right now, our spending habits, and our money management. Many of our beliefs could be wrong. While this could be hard to accept at first, our bank accounts are the evidence on how good or bad we perform.

One of the false belief that was instill to me since I was a kid was the belief that "money is the root of all evil" when in fact, it is the "love of money" that is the root of all evil. I was lead to believe that many wealthy people are mean, corrupt, greedy, and they have a hard time sleeping at night because of fear and distrust. Through books and videos, I learned that these wealthy people are not at all like that. As a matter of fact, they are telling to be less attached with money because the more attached you are with money, the lesser freedom you have and more restricted in options. The same people seek freedom through pursuing their passion, helping others, and creating opportunities--and in doing so they become wealthy. I do not see anything wrong with what they are doing. In reality, what's wrong is remaining to be financially poor and financially uneducated when we have the chance to improve our lives and help other people too.

Poor people or shall I say poor-minded people tend to define wealth as just material wealth. Some would justify that they prefer the life that they have because it's less complicated. But when you try to scrutinize their lives, they are problematic--and guess what's their problem is? It's money. And they make decisions based on money. Perfect example is going to work abroad for money. So, tell me, who is more attached with money?

Recognizing the wrong beliefs about money gives us the opportunity to correct it and develop new habits. In doing so, we need to change our poor habits and educate ourselves to the tried and tested formula of experienced and successful people.

Taking control of your finances and your life

It is quite difficult to take control of something if you do not seems to know what are the things involved and if you do not have the courage or the drive. And it is quite difficult to identify these things involved if they are not recorded. This is the reason why I record my income, expenses, and investment ( yes, I have an investment now. It is small but that's the way I should start it). My records show my financial standing and help me plan to reach my financial goals. Similar to companies, whose owners look at their financial records to make a sound financial decision, we as an individual need to do it too.

Our finances is one aspect of our life. It defines us. And like other areas in our life, our finances requires self-discipline if we wish to succeed. Sadly, it is easier said than done. Many people either abhor or dread the word DISCIPLINE same way as with the word RESPONSIBILITY. But if we do not do anything about it, we are just people who reacts to situations. An easygoing life, while more relaxed, does not give that sense of direction and pride. The moment trouble comes you'll be caught off guard and wreck your finances and life. I should know because I've been on that situation. My debt was bigger than me. Good thing I believed that God is bigger than everything else because if not, I would have killed myself.

Robert Kiyosaki teaches us to let money work for us instead of we working for money. That was quite hard to grasp at first especially if you don't have ideas about investing. Read his Rich Dad, Poor Dad book.

Once you get the habit of recording your finances, planning your financial future, and investing you'll feel more confident, happier, and stronger.

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