Once someone finds out that I write about personal finance for a living, the conversations about a person’s financial situation never seem to stop coming.
That’s no problem, though, as I love talking about financial topics and helping others.
However, one thing that comes up often is that many are somewhat clueless about their financial situation.
There have been many times when someone has told me that they had no idea what their monthly mortgage or rent payment is, they don’t know how much they are putting towards retirement, they are unaware about how much debt they have, and so on.
More shockingly, some can’t even give me an estimate and have no clue whatsoever about what the amount would be. Or, when they do give me a number, their significant other chimes in about how they are extremely wrong.
This is a problem.
Everyone should be aware of their financial situation. I believe a person should know what their:
Mortgage or rent payment is;
How much debt they have;
How much savings and retirement they have;
What their financial goals are; and more!
I understand that sometimes a person is not aware because they are not the person who manages their family’s finances. However, I believe there are many benefits of understanding your family’s financial situation.
Below are some of the many reasons for why you should be aware of your financial situation.
Knowing your financial situation will help you keep a budget.
It would be very hard to create and keep a realistic budget if you had no clue about your financial situation. By being aware, you will understand what you are working towards with your budget.
Knowing your financial situation can help you when it comes to creating a budget, keeping track of expenses, lowering costs, saving more, and so on. It would be very hard to do any of this if you had no clue what was going on.
Being aware may prevent everything from falling on one person.
What problems would arise if something happened to the person who is in charge of your family’s finances?
By not taking part in the finances of your family, you may be in for a rude awakening. You would already have enough on your plate if something happens to a loved one so it is much better to stay aware now than having to worry about the little things later.
Plus, what if the person who is in charge of your financial situation wants YOU to be aware as well? Maybe they want some help every now and then so that the family’s finances are not always weighing them down.
It is not a healthy situation for one person to have to deal with all of the stress from an unwanted financial situation.
Knowing may stop financial infidelity.
No one wants to be a victim of financial infidelity. However, if a person is unaware of their financial situation then the other person may be able to keep big financial secrets quite easily.
It’s best to always know your financial situation so that you have open communication.
Being aware can help you with your goals.
If someone in your family has no clue what the family’s financial situation is, how would they really know and understand what the family’s financial goals are?
They most likely wouldn’t have the same financial motivation as someone who is aware, which may be holding you back from completing your goals.
Are you aware of your financial situation? Do you think others should be aware?