Financial Helplessness: Young People and Negativity about Personal Finance

I need to rant about something. I saw something today that I see about every day, usually multiple times. I keep seeing memes on Facebook about how helpless people feel with their money. Usually, this is people in their early to mid-20’s, like myself. People sharing memes about how their checking account is always negative or has a few cents in it, posts about how they have no handle on their money at all, how their spending is out of control, etc. Basically, memes as a way to blow off the fact that they are spiraling out of control with money, and will never do anything but live paycheck to paycheck. Do you know what I am talking about? The attitude people take of making a joke out of spending your entire paycheck the weekend after payday and struggling getting by for the rest of the pay period. The “Haha, me so broke, me always struggle, me so young, can’t adult today” toxic way of thinking. Grow up! Get a grip on your life! Are you kidding me? It isn’t cute to be totally irresponsible. Is that seriously all you strive to be?


Okay, now that I have gotten that off my chest, let us evaluate this. There are a few different reasons I can see for this trend:


  1. You legitimately never learned how to budget or how to handle any amount of money, and you just spend it when you have it until it is gone. (I’ve been here)


  1. You know how to manage money to some degree, but you have impulsive tendencies, and spend money on the wrong things at the wrong times. (I’ve been here)


  1. You do not put any effort or energy into thinking long term, and by long term I mean longer than right now. (I’ve been here)


  1. You are slave to one or multiple addictions that cost you financially. (I’ve been here)


  1. You try to keep up with your friends who either make more, or are just as irresponsible as you are with their money. (I’ve been here)


Before I address these five points, I just want to clarify something. If you’re a single parent, who lives in poverty, and struggles to provide for yourself and your children’s basic necessities, I am not talking about you. First of all, you’re stronger than most people, and you kick ass. Second of all, you aren’t the one joking about what I am talking about. This is not about you. This is for the people that may have a little excess income that is after the bills are paid (or not), and make poor choices with that money. Let me also address the fact, that, as indicated by the parenthesis after my five points, I have been there. I get it. I have been on both sides of this fence. Most of what I am trying to teach is only information I know because I lived it and spent a lot of time reading and researching how to get out of it. I’ll be the first to admit that I do not have a degree in this stuff, and I am not some huge brainiac genius. I am far from that. I just have learned a thing or two, and I have a passion for money and helping others learn what I have learned. With that being said, let’s dig into this thing!


1: You legitimately never learned how to budget or how to handle any amount of money, and you just spend it when you have it until it is gone.


From my experience, this is usually the focal starting point for poor money management skills. You never learned how to in the first place. That is of no fault of your own! Here’s the kicker, it becomes your fault when you become aware of it, are shown the resources to avoid it, and ignore those things and continue behaving the same way. There is no excuse for that, and I don’t feel bad for you anymore. A few things on this specific topic, generally, when you see someone who sucks with handling money, look at their family and parents. Was a general lack of hope regarding money passed down from generation to generation? Or does it at least go back one generation? I know that in my experience, people who are bad with money typically have parents that are bad with money. Or, their parents do not have much of it. It is usually one or the other, or both. There could be a mindset of “Hey, if the bills are paid, blow the rest and have some fun!” The problem with this outlook is that if you spend your entire adult life blowing all of your excess income, you’ll never be able to retire, because you will be working until you die because you have nothing set back at all. Forget social security, which is not going to cut it. There are so many other ways to build an extremely significant retirement nest egg, with fairly little effort. The only thing you really need is time. Anyways, the main point with this section is that if you suck with money, you probably had no direction of any kind. You have to figure all this money out on your own without much help, which can be a very daunting task. The good news is that there is a borderline unlimited supply of information to help you get this money thing figured out and under control.


2: You know how to manage money to some degree, but you have impulsive tendencies, and spend money on the wrong things at the wrong times.


Here is the person that is young, typically single, and makes a decent income for their situation, often resulting in anywhere from $250 to $1,000 extra in discretionary income per month after bills are paid. I am talking about single 20 something year olds with no kids. You can live somewhat large for your situation. You pay all your bills on time every month, maybe even a little early. You have some luxury subscriptions and bills, like a high dollar sports streaming service (NBA/MLB/NHL/NFL Network), you have an unrealistically high car payment that your income can not really justify having, but you think you can afford the car because you can make the payment (you buy a car that costs $28,000, and your income per year is $28,000). You save up to buy other things that your income can not truly justify having, like Gucci loafers and Louis Vuitton wallets and Versace sunglasses. When a $500 wallet is a fourth of your entire income for the month, you CAN NOT AFFORD IT. When it is a fortieth of your monthly income, or even a fourteenth, then you can afford it. I just see so many young people my age buying these ridiculous high dollar designer items to impress their friends who are just as clueless as they are, and for some reason thinks that they are well off because they saved up to buy something that is out of their price range. Think about it. Normal people spend between $10-$50 dollars on a wallet. That is the amount of percentage to your income that an accessory item like a wallet should cost. Do you make ten times the normal income? I’ll give you some help with this. The median household income in America is a little over $51,000. These are the average Joe’s carrying the $10-$50 wallet. Can you justify spending ten times that? If you make $510,000 a year, you could. But you probably don’t and probably can’t, so sit down, be humble, and quit buying overpriced designer stuff until you get up to a level of income that can justify it. Your Gucci fund needs to be spent investing in appreciating assets like mutual funds right now, especially while you are young. You have the potential to reap monstrous returns on your investment. You have more of an advantage the more years you have ahead of you. This leads us into our next topic of discussion.


3 You do not put any effort or energy into thinking long term, and by long term I mean longer than right now.


Poor people cannot get past the trap of instant gratification. They want it NOW. This is one of the main reasons that credit card debt is such a problem for poor people. When they swipe their credit card, they do not feel any initial pain from the purchase like they would with cash or it coming straight out their bank account, and they have the item NOW. They will worry about the debt later (or never at all), and they have the thing now. That is all that matters. Leave a poor minded person some available credit and some time, and they will be in credit card debt, guaranteed, every time. The main point I am trying to make here is that the poor person is not thinking about the next day, week, month, year, or decade. They are only concerned about right now. What feels good now. What they want now. It is all about NOW. Here is an example of a poor person’s thinking versus a rich person’s thinking.

Person A: “I have $450 extra ‘fun money’ in my income this month. Let’s see. I can fund my pack a day cigarette habit for about $165 of that (cigarettes are around $5.50 a pack here). That brings me down to $285 left. Okay, I am going to need around $5 a day for meals (fast food) because I am not responsible enough to cook meals at home which would cost more like $1.50-$2.00 a meal. So that is $150 on fast food, which brings my budget down to $135 left. That is two or three crazy nights out at the bar! Or one, crazy night out, and enough for plenty of cheap beer and booze at home! Looks like I am set! I may have to barrow $20 towards the end though, I may go overboard at Braums and Little Caesar’s and be a little short for smokes the last few days. Oh, and if I ever find myself having ANY extra money, I will spend it on lottery tickets as a way to guarantee that I will never actually hold on to any extra cash, because my odds of being crushed by a meteor is 64 times more likely than winning the jackpot.”

I have known people who I am pretty sure literally live exactly by a similar budget to this. Here’s the flip side to this coin.

Person B: “I have $1,000 extra ‘fun money’, because I have cut my expenses down and eliminated my $300 a month cable bill, among other unnecessary things. I very rarely eat out, as I grocery shop and cook at home. I have cut my recreational activities (drinking, smoking, etc) either completely out or down to very little. I have taken the time to invest in myself, and have read some books and watched some videos about money. I understand that if I am 25 years old right now, and I start investing $450 a month into a Roth IRA backed by a mutual fund, returning the historically average return rate of 7%, by my 65th birthday, I will have $1,118,482.00 available without needing to pay ANY taxes, because the investments were with after taxed dollars (they were out of my net paycheck, which had already been taxed), and since it is a Roth IRA (IRA means Individual Retirement Account), I am exempt from taxes on withdrawals after age 59 ½. The maximum yearly contribution amount to a Roth IRA is $5,500, so I will stick with my $450 monthly amount. That brings my $1,000 fun money down to $550. I am going to take $250 of that and save it in a savings account every month for rainy days, car repairs, and unexpected emergencies, which gives me $3,000 a year in liquid cash savings (liquid means easily available, like in a savings account, not in stocks). This brings me down to $300 left for the month. Since I am already investing $450 a month and saving $250 a month, I am going to use this last $300 for whatever I want that adds value to my life. I will use it to save for a new computer, use it to buy books to continue educating myself on topics that I am passionate about, or any other way that I see fit. The only thing I will not do is loan “Person A” $20, because he needs to figure out how to prioritize his pleasures in life, and I think retiring a millionaire is more ‘fun’ than booze, cigarettes, fast food and lottery tickets.”

See the difference here? Please understand that I am not talking down to anyone. I WAS “Person A” in the last few years. I am preaching to myself on that one, along with many others who think that way. I am just trying to share what I have learned, and what got me out of that cycle. You have to understand that there is such a better way to live than for the weekend and paycheck to paycheck. For so many people, the ONLY changes that need to happen are the following three things: a reality check, an attitude adjustment, and a spending adjustment. I understand that there are unique situations out there, and that some people have them. You aren’t who I am talking about. I am talking about the 20s something year old that has no kids, is single, and has a somewhat decent job. Figure out what you want out of life, and know that financial freedom is a reality that is just waiting for you to choose it.

4 You are slave to one or multiple addictions that cost you financially.

 Addiction is often associated with drugs and alcohol, and rightfully so. I encourage you to look at your lifestyle and budget to evaluate if you have one or many. If you do, try to identify what you get out of it, and what you have to give for it. For example, I used to be a pack a day smoker. I was giving about $5.50 a day for cigarettes, which costs me $154 a month (most of a utility bill), or $2,007 a year (a new MacBook or a nice vacation). I was spending a ton of money on alcohol, whether it was going out or drinking at home. Easily a few hundred dollars a month here. This caused me to make some major life changes. When you look at the short term financial damage, it doesn’t look AS bad. Still pretty bad, but you trick yourself into seeing it as reasonable. For me, seeing the thousands of dollars I was spending every year on this stuff was enough for me to make drastic change. I identified that I was giving a whole lot of money for these things, and in return, I was getting very short term pleasures, a lot of health issues, both long term and short term, I smelled like an ashtray, and did a lot of things intoxicated that I would love to take back, but never will be able to. I do not think there is any problem with enjoying alcohol appropriately and in moderation. The problem is that most of us do not do this. Or, we do not do it every time, but we think that since we sometimes do, there is no problem. If you cannot control your intake EVERY time, you have a problem. I could not control myself EVERY time, so I knew that I had a problem. Addictions are expensive. Anything from Starbucks every day to smoking to drinking to drugs, it all cripples your ability to be financially secure. My recommendation is to pick one thing you want to work on stopping or cutting back, educate yourself about it via books or the internet, and focus on one thing at a time. Even if it takes you months or even years to kick it, just get the ball rolling in the right direction. Do what you need to do to make changes where changes need to be made. Imagine life with no hangovers (or at least very rarely), not smelling like smoke, tasting things better, smelling easier, and just overall feeling better. You can do it. It will enable you to do things with money that will literally set you up for life. Also, on the topic of health, 75% of the American population is dehydrated. Drink more water! You will save on sugar filled soft drinks, and you will seriously feel so much better.

5 You try to keep up with your friends who either make more, or are just as irresponsible as you are with their money.

Some people make more money than others, and have more disposable income than others. There is nothing you will ever be able to do to change that, other than campaign for Marxism. Until then, some people are going to be better off and have nicer things than others. There are two ways that people look at this. Keep in mind, rich and poor are mindsets here. The poor get pissed off and talk about how it is not fair that the other person has more, and they are easy to get jealous. The rich either are in the boat of having more, or if you have a rich mindset but are not wealthy yet, you still applaud the person for achieving a great level of success, and you look for ways to ACHIEVE IT TOO. I have never understood why people get so mad that others have more. To me, it just proves that it is completely possible to do! It motivates the hell out of me. Seeing wealthy people living lives that most people dream of only causes me to not only dream of it, but develop plans of action to achieve it too. There is no shortage of money out there, just a shortage of people going after it (Grant Cardone quote). With all of that being said, do you find yourself trying to keep up with your friends that suck with money, yet spend all of what they can scrape up on overpriced stuff? Whether it is cars, bags/wallets, sunglasses, jewelry? I covered a lot of this in section 2, but it is worth mentioning again. Because here, it is not you necessarily doing it, but you are chasing your friends who are doing it, resulting in you doing it too. Stop it. Most of your friends with “nice” stuff are either in a lot of debt, or have absolutely no money to spare afterwards. They are fake rich. They try to look like they have money by having designer stuff. I challenge you to study the habits of real life millionaires and even billionaires. Some live flashy, but you would be surprised at how humble a lot of their lives look. The average millionaire is not buying Italian sports cars and suits, and that is the main reason he/she is a millionaire. A large percentage of truly wealthy people (let’s say $1,000,000+ net worth) spend their money on things that make them more money, not things that absorb and cost them their income. Stocks, bonds, CDs (even though their rates suck right now), real estate, and business investments. These are what the rich buy. The poor lease the new Benz, put the Gucci loafers and the Louis Vuitton bag on the credit card, and eat/drink out all the time. The rich buy things that turn in to more money. The rich ONLY spend income off of income producing assets to buy luxury items, if they ever even buy them. The moral of this story is that if you have a friend that is always spending extravagantly, they either do have a lot of disposable income or have gotten to a point where they are able to make good savings and investment choices, and still have some left over. More likely however, they just do not have a clue how to manage any excess income responsibly. The point is, do you, and do not chase or try to compete with your friends that are blowing all their money with nothing to show for it. You know better than that now, and WILL have A LOT to show for it in the end.


Take true and personal responsibility for your situation. No one “did this to you”. You did this to you. You make the decisions on a daily basis that make it impossible to get any sort of ahead with money. Now that you have seen both sides and have some things to think about, you can either continue what you are doing, getting the same results you have been getting, or you can change some things and live like the people you’ve been envying and hating all this time. TAKE RESPONSIBILITY FOR YOUR ACTIONS. Quit blaming others for your choices. One last thing, anyone that says “I never want to be rich because money ‘changes’ people” needs to shut up. If that isn’t a cop out, I don’t know what is. What an easy reason to accept mediocrity in your life. Statements like that only serve to make you feel better about your lack of effort. It does not have to be that way. Money can and does change people, but that is because they let it. If you are mindful, you can make the choice to NOT let that happen to you. Always treat others with respect. Money does not make anyone more or less valuable as a person. We are all awesome; some of us just do not know it yet. Thank you so much for reading.



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