I have some idea of who you are. Half of you are under 35 years old. Statistically, you’re probably Malaysian, and many of you live in urban areas. Don’t be weirded out or anything, the info is from Google Analytics.
Many of you are silent readers, but I get emails and comments from some of you, which is nice (it really is!). You told me about your life, your financial situation and how you’re trying to improve it.
Many of you referenced that pivotal moment in your life when you realised how important personal money management is. Some of you were thrown into a situation where you HAD to figure it out, while others were just tired of facing the consequences of frivolous, YOLO-led spending in your youth.
But one thing is clear – all of you want to be better with money… because you think you’re not good with it. You don’t think you’re a good enough saver, investor, and/or income earner.
Why is that? Why do so many people struggling with one of society’s most basic foundations – the money system? We should have been experts – we use and interact with it daily. But why is money management still so hard to master?
It’s not you, it’s them
Or at least, it’s not 100% your fault why you are not confident with money… yet.
To be clear, some of it *is* your fault – I’ll delve into that in a bit – but mostly, the system is rigged to favour the rich. If not, how else would you explain the Top 50 richest Malaysians gaining USD11 billion MORE during the pandemic while most of everyone else’s salaries and wages fell in 2020?
However, with my chats with financial planners and advisors, low income is not the whole picture. There are a lot of people who have high incomes and yet STILL are not good with money – they have problems with cashflow management and get into debt. How do you explain that??
In this article, I’m going to attempt to unpack the layers, because I’m sick of people blaming individuals for things that are outside their control. Hopefully in the process, you will see how things work beyond the individual level, and stop blaming yourself, if you do.
Here are things that cause you to believe you’re ‘not good with this money thing’, aside from not earning enough:
#1 – Your parents
Do you know what’s the number one predictor of financial success? Being born to high-income families.
Yup. Not your IQ, not your smarts, but simply put, whether you hit the ‘birth lottery’ or not. There are exceptions to the rule, but those are exceptions.
Your socio-economic background plays such a big role yet is frequently silent in much of the personal finance content space. Where you live, the amount of disposable income afforded to your upbringing, your schooling options – all these attributed back to your parents – makes a major impact on your relationship with money.
For example, someone raised with parents who don’t talk about money or mentions it negatively will tend to have excessive fear with money management, and might even avoid dealing with it. That’s why some people don’t check their debt levels, their bank accounts, do budgeting and so on. They’re scared to confront it.
On the other hand, someone raised in a financially stable family may talk about business dealings and investments and leveraging all the time. So by the time they reached adulthood, they’re already comfortable with the financial jargon and have an easier time understanding and navigating the financial world.
I want you to be critical of those entrepreneurs and businesspeople who have the ‘If I can, you can too!’ mentality. More often than not, they had help; they were born rich and/or have their family’s income as safety net to catch them if they fail. Sure, they may be smart in their own right, but they ignore to mention the escalators they hopped on while everyone else used stairs.
At the same time, I want you to not blame your parents either, because they were also part of a system bigger them themselves. Recognise and resist the negative influences they may still have, but continue your own self-development journey regardless. That’s the only thing you can do to go forward.
#2 – The sophisticated marketing targeting you
Serious question: Why do we buy things we technically don’t need?
No, you’re not simply ‘weak against temptations’. Instead, your buyer profile was dissected by companies who want you to buy their products. You are exposed to hundreds, if not thousands of these attempts every day.
So how can you – an individual – ever stand a chance against these attacks? Sooner or later you will succumb.
Companies spend a lot of money and effort to get your money. They do this by:
- Advertising in spaces that you have to pass through, and in your social media;
- Employing teams of behaviorial scientists and psychologists to understand your purchasing habits,
- Employing marketers, digital marketers etc to cut through the noise and get to you;
- Tweaking shop and mall layout, lighting, item placement, smells, colours;
- Getting likeable ambassadors to talk about them;
- Appearing in articles, Quora, forums, Reddit (please be sceptical when someone recommends something in ‘public opinion’ spaces. There are people whose jobs is to do this sneaky form of marketing);
- And more
The next time you buy a product, think of how they succeeded in influencing you.
P/s – I’m not hating on all companies, mind you. Just the ones that:
- Lobby and receive subsidies from governments (so they can price their unhealthy/low-quality products lower, thus making healthy/high-quality products seem more expensive)
- Pay very low wages
- Harm people (weapons, drugs including nicotine and sugar) and the environment
- and using manipulative marketing techniques
#3 – You and the people around you, aka ‘The Society’
Every time society and the media positively correlate displays of wealth and excess consumption = success, I cringe. Status symbols that exist as status symbol’s sake have to be one of the biggest wastes of Earth’s resources.
I bet you have been privy to conversations that look like below:
- “Wow she drives [insert expensive car]”
- “My boyfriend loves me, he bought me [expensive thing]”
- “Your [item] is old enough and [minor inconvenience], you should get a newer version”
- “Shopping is my hobby; here’s my [category] haul”
- (posts money/jewellery/limited edition items on social media)
Here’s an invitation to rebel a bit. You can choose:
- Not to compliment on luxury products that people carry/drive/wear;
- To ignore commentaries on other people’s wealth – in conversations and in media;
- To ignore peer pressure to have the latest gadgets, fashion and other similar things;
- To focus on long-use, quality products;
- To disassociate yourself with people who brag about possessions and how they’re active consumers;
- To realise that they could have funded their lifestyle with money they don’t actually have, and is actually in huge debt
- And more
The less society focuses on possessions, the better. You can shine without all that, I promise you 🙂
#4 – Your own personality
Okay, so I mentioned earlier how you’re not totally faultless, yes? Some people have personality traits that may speed up or slow down their personal finance learning process. For example:
- Conscientious people tend to have higher self-discipline. They tend to be better at delayed gratification (aka waiting before purchasing something they don’t need) and can follow budgets.
- Agreeable people are amazing friends and family members, but might be vulnerable to opportunists, who know you won’t deny their requests for favours, money and time. If this is you, you have no choice but to learn how to say no.
I’ve written more in-depth on financial behaviours and even shared my own results.
Admitting that I am a hypocrite on so many levels
See, here’s the thing. I talk big about us being manipulated by consumerism-driven culture and companies, but I am – and will continue to be, unless I adopt the live-off-the-land-approach – a consumer. I like walking in malls and looking at stuff. I enjoy looking at pretty things. I benefit from high-volume factory productions that provide me with cheap products, should I want them.
Not just that, I conveniently ignore bad practices that my favourite companies use. I excuse the branded content that entertained me. I assume someone else will neutralise my wastes. Sometimes I go, personal responsibility? What personal responsibility?
Look. I’m never going to refuse the comfort that money can bring. I’m a city girl. But what I can do is practice mindful spending. Only buy products I need (not want) and use my money to buy happiness in a more effective way. And – when the means and opportunity comes – to help those who are most financially vulnerable.
Anyway, what I’m trying to say in this commentary piece is you’re NOT not good with money. You just live in a world where, unfortunately, people with excessive greed exists, causing excessive profit-taking and lack of social safety net which ultimately, widening wealth inequality.
So where do we go from here? To me, we should acknowledge the broken parts in this system we live in, and try to improve it.
At the same time, what you can do is cut yourself some slack, stop the negative self-talk and say you’re not good with money, because you WILL be soon enough, through sheer determination and commitment to self-improvement.
I’ll end here. I hope this post made you think, a little bit, about the systemic and environmental factors that influenced your relationship with money. All the best, and keep going on. Take care and be safe.