How Difficult Is Managing Your Finances?

[LivingAlmostLarge]

It's really difficult. I find it difficult to manage now. I used to be more into it with kids but now with everything else sitting down and paying bills and really looking into our investments take a lot longer. It's a combination of we have more investments/more money and less time.

Before you say how busy can you be? It gets worse as kids get older and there is less to do for them and more to do with them.

But that being said I can see with friends who are trying to get their financial houses in order. They are struggling. They have no idea how to do a budget, how to pay bills, how to invest or even set aside money. It's really hard to change your lifestyle that you've been accustomed to.

A bigger thing is that many people who organized their finances when young just continued down that path. You were responsible before kids, chances are while you aren't the best at watching your finances after you are still sticking to a budget. You likely started 10% into a 401k/ira then never changed it. Then suddenly you have a bigger pile of money and even with the kid expense you are used to living on 90% of your money.

You might be used to setting aside money for a new car. Setting aside $X amount a month so you are able to buy a bigger home, vacation, etc. It's all these little things that seem easy but are really hard when you are making huge life changes.

Newly married, living together, new house, new baby all within 2 years. Usually these things all hit and start snowballing (especially if you are older when you meet someone, get married can be done all within 2 years). By the time we had our kids we were together 10 years, been used to home ownership for 8 year, 2 dogs, serious savings for those 10 years, savings/retirement, etc. So yes kids were tiring and stressful but we had a solid foundation that I put things on auto-pilot (even now) for about 3 years (i admit to mailing it in) and then we got serious again about saving.

Then when it was time to make big financial changes these past 4 years we were well prepared and had a firm grasp of it. Right now we just bought a house and are going into auto-mode.

We accomplished job then house and now just about to start mailing it in. I have a rough budget and we have "ideas" of saving and spending. We're also so far into a foundation our returns are bigger than what we save.

So yes I can definitely see how hard it is to start out. I thought it hard at 25, I can't imagine how much harder at 35 is it with so much more responsibility.

[Nutria]

But that being said I can see with friends who are trying to get their financial houses in order. They are struggling. They have no idea how to do a budget, how to pay bills, how to invest or even set aside money.

That's got to be a low-intellect problem (seeing that 50% of the population have an IQ less than 100).

[kork13]

[Quoting piecemeal]
It's really hard to change your lifestyle that you've been accustomed to.

You might be used to setting aside money for a new car. Setting aside $X amount a month so you are able to buy a bigger home, vacation, etc. It's all these little things that seem easy but are really hard when you are making huge life changes.

Newly married, living together, new house, new baby all within 2 years. Usually these things all hit and start snowballing

This is my family almost exactly. I was saving heavily throughout my 20s, and then at 27 y/o I met my wife. We got married a year later, and now 3.5 years since our marriage, we've got 2 kids; we've owned 3 homes, sold 1, rented 1, moved into 1 more across the country; sold 2 cars & bought 2 newer cars; and all the while managing to still save pretty aggressively (between 40-50% of gross). But now, with childcare expenses, 529 savings, and care/feeding costs for 2 kids, as I look at our finances periodically, I'm starting to see it running pretty thin.

So when DW went back to work last month and DS2 started into daycare, I had to reduce our savings rate by about 4% just to keep our budget in the black. As time goes on, though, other less obvious costs are creeping upward, and I'm again looking at potentially needing to reduce our savings some more in order to give some buffer to our bottom line. So just as LAL said, even for someone who 'has (had) it all together' as you might say, things kind of snowball as a family grows, and managing the finances definitely gets more difficult. With that said, I suppose the fact that I have at least recognized those increased expenses and adjusted our budget (heck--we've managed to maintain a budget--WIN!) to account for those rising costs demonstrates that it is in fact do-able. But the point remains, finances get tough when things get busy!

[Nutria]

This is my family almost exactly. I was saving heavily throughout my 20s, and then at 27 y/o I met my wife. We got married a year later, and now 3.5 years since our marriage, we've got 2 kids; we've owned 3 homes, sold 1, rented 1, moved into 1 more across the country; sold 2 cars & bought 2 newer cars; and all the while managing to still save pretty aggressively (between 40-50% of gross). But now, with childcare expenses, 529 savings, and care/feeding costs for 2 kids, as I look at our finances periodically, I'm starting to see it running pretty thin.

So when DW went back to work last month and DS2 started into daycare, I had to reduce our savings rate by about 4% just to keep our budget in the black. As time goes on, though, other less obvious costs are creeping upward, and I'm again looking at potentially needing to reduce our savings some more in order to give some buffer to our bottom line. So just as LAL said, even for someone who 'has (had) it all together' as you might say, things kind of snowball as a family grows, and managing the finances definitely gets more difficult. With that said, I suppose the fact that I have at least recognized those increased expenses and adjusted our budget (heck--we've managed to maintain a budget--WIN!) to account for those rising costs demonstrates that it is in fact do-able. But the point remains, finances get tough when things get busy!

Is that honestly difficult (aka "hard to do"), or is easy but unpleasant to do?

[kork13]

That's got to be a low-intellect problem (seeing that 50% of the population have an IQ less than 100).

I have to wholeheartedly disagree. I have a large number of VERY intelligent friends who know peanuts about money management. By contrast, I've gotten some great financial advice/ideas from other friends who are (all love and respect to them) admittedly rather dim -- even one person in particular who is mentally under-developed.

It's not a question of intelligence (side discussion: IQ is a poor indicator of life success), it's about ignorance. Rich or poor, intelligent or not, anyone can make good money choices for themselves. It's a matter of them learning the basic principles of living on less than you earn & saving consistently. Anyone can be taught to do that, but if you never learn how to use your money wisely, you'll always struggle with managing your money (even if you earn a 6-7 figure income or design space rockets).

[Nutria]

I have to wholeheartedly disagree. I have a large number of VERY intelligent friends who know peanuts about money management. By contrast, I've gotten some great financial advice/ideas from other friends who are (all love and respect to them) admittedly rather dim -- even one person in particular who is mentally under-developed.

It's not a question of intelligence (side discussion: IQ is a poor indicator of life success), it's about ignorance. Rich or poor, intelligent or not, anyone can make good money choices for themselves. It's a matter of them learning the basic principles of living on less than you earn & saving consistently. Anyone can be taught to do that, but if you never learn how to use your money wisely, you'll always struggle with managing your money (even if you earn a 6-7 figure income or design space rockets).

Kork,

I explicitly highlighted "no idea ... how to pay bills".

[Gailete]

I just heard a radio commercial for a regional bank with the first line being "it's NEARLY IMPOSSIBLE to manage my finances with a 2 year old and a 4 year old". At the end the disclaimer was "sponsored by a real customer of Regional Bank".

They must have done poll studies on this and find the first statement to be relatable or else it'll be an ineffective advertisement.

So how difficult is it to manage your finances?

GRRRRRR!---I have heard that excuse or similar ones for so many things I can't stand it and it is ridiculous. There is even a commercial out now where a woman says she is too busy to do something because of her kids in school, their homework and sports. Uh, maybe I don't understand the concept anymore, but isn't the kid the one going to school? Except possibly taking them and picking them up they have a good 6-7 hours free of kids each day. And isn't a kid supposed to be doing their homework on their own? And isn't it the kids that is playing or practicing, why does that make her too busy even if she is driving them to places and back? It is a stupid commercial. Just like the one for some neighborhood way to find a fix it man. The guy is saying now that he had kids he doesn't want to spend his weekends fixing things. Doesn't he know that this is a time to teach those kids some lessons on how to fix things? As well as a chance to spend quality time with their kids?

My absolute favorite was an eBay ad years ago. A woman was selling her top of the line sewing machine (that was running around $2500-3000in 1996 dollars). She said she had put it in the closet when she got it, had never used it as she had a toddler! Sorry. I did lots of sewing, not only with my kids running around as toddlers but also other people's kids as I did home day care. My philosophy as I told the parents was that I was not a preschool class, but I was a mother and dealing with the things that mothers do even if she does have a few toddlers in the house! What is this latest generation of kids going to feel like as they grow up to hear all the things that their parents gave up for them?

In general, I don't have any problems managing my finances except for not having enough finances at times. Actually, I did better when my kids were younger and I had a brain functioning on all cylinders, unlike now when I am constantly tired and on pain medication that can leave me a bit fuzzy headed.

[~bs]

Difficult, but not impossible. And I can understand why someone with 2 young children (expensive) would feel like managing their finances is an impossible task if they're not used to managing a budget and making "tough" sacrifices like cutting out their daily starbucks and drinking water instead. lol If you're already living paycheck to paycheck without kids, it's easy to get underwater quickly due to the additional expenses.

[disneysteve]

I explicitly highlighted "no idea ... how to pay bills".

I think a lot of people don't really know how to pay bills, and I agree that it has nothing to do with IQ. It has to do with having a plan and being in control of one's finances. You need to know how much is coming in and anticipate how much needs to go out. Otherwise, a bill could come in one day, you pay it in full, and then another bill comes in a few days later and you're out of money.

I have often had patients tell my front desk staff, "Make my appointment the first week of the month because that's when I'll have money for my copay." They are unable to plan ahead for a bill that will happen later in the month.

It isn't that they don't physically know how to pay a bill. Write a check or go online. It's that the overall process of paying bills month after month is what eludes them.

[Nutria]

I have often had patients tell my front desk staff, "Make my appointment the first week of the month because that's when I'll have money for my copay." They are unable to plan ahead for a bill that will happen later in the month.

Give them an IQ test, and see where on the distribution they land. Dime to a dollar that they land lower than higher.

[Gailete]

I think a lot of people don't really know how to pay bills, and I agree that it has nothing to do with IQ. It has to do with having a plan and being in control of one's finances. You need to know how much is coming in and anticipate how much needs to go out. Otherwise, a bill could come in one day, you pay it in full, and then another bill comes in a few days later and you're out of money.

I have often had patients tell my front desk staff, "Make my appointment the first week of the month because that's when I'll have money for my copay." They are unable to plan ahead for a bill that will happen later in the month.

It isn't that they don't physically know how to pay a bill. Write a check or go online. It's that the overall process of paying bills month after month is what eludes them.

I understand that completely. During the years I was married to Mr. Big Bucks (as my son called him as he weekly spent much more than he took in), I developed an easy system to be sure I was paying bills in the right order of due date. It became a simple process that I have been using for 22 years now. Unless a bill gets lost between the mailbox and my basket where I keep bills, I can tell what is due and when. and because of my tracking all this in a spiral notebook I have my records going back all those years. I can sit down in November and fill in January > December for the next year. Not only do I fill in my bill paying dates, every Wednesday, for regular bills such as mortgages, they can get filled in under the correct pay week, way ahead of time. Things that 'surprise' people when they get the bill like my husband’s life insurance or the business insurance on any pianos in his shop, also get written in ahead of time - months before they are due. The due date never changes. I write notes on December and highlight it, to be sure we write down our car's mileage at the end of the year. It is easy and during the first year when I felt like I was dying, until I got diagnosed and treatment started, I depended highly on that notebook to be sure I was paying bills on time. Because our finances are sort of sporadic these days, I still have to rely on that notebook.

Too many refuse to figure out a system of any kind for paying their bills. It is easier to laugh it off as "I'm such a dummy' when it comes to bills, but it isn't funny in the least. It does remind me of a friend in college who couldn't figure out how I managed to keep up with all my school work as well as working my way through. She was my roommate’s sister. I had, what to me, was a very easy system to keeping up and knowing what would be happening each week. I loved getting those syllabus' in college since in HS it was always a surprise when a test would be or when a paper would be due. So, I took some time trying to explain it to her and I could see it going right over her head. All it was, was a way of combining all due dates for each class, and then breaking them down into weekly chunks and if we were supposed read a certain amount, I would write down how much I needed to read each week. Then each day I would know what I had to do schoolwork wise and the rest was my time – to work.

I don't think my systems were difficult to use, but some just can't grasp that there are ways to stay organized and it is much more fun to be organized than not.

[scfr]

So how difficult is it to manage your finances?

Like many things, it depends on how much you have learned about the topic, and how much hands-on practical experience you have had.

For someone who has a full-time job and 2 young children to care for, with very little knowledge or experience, who has just made the decision that they need to get serious about their finances, I can imagine that it might feel like a big challenge.

[LivingAlmostLarge]

Give them an IQ test, and see where on the distribution they land. Dime to a dollar that they land lower than higher.

Nutria, I've met a lot of people who have no clue but have graduate and professional degree. They literally have no clue about money. Mostly women but still it's a lot. They went from parents paying the bill to marrying a man who pays the bills. Even if they work full time they haven't a clue what to do or how. You'll joke and say they are "not intelligent" um actually that's not true. All have been very smart but they haven't even had to learn about money. So yes it is overwhelming.

[Nutria]

Nutria, I've met a lot of people who have no clue but have graduate and professional degree. They literally have no clue about money. Mostly women but still it's a lot. They went from parents paying the bill to marrying a man who pays the bills. Even if they work full time they haven't a clue what to do or how.

That was out-dated 30 years ago.

You'll joke and say they are "not intelligent" um actually that's not true. All have been very smart but they haven't even had to learn about money. So yes it is overwhelming.

I stick to my assertion that if you can't figure out how to pay bills, that you're on the lower edge of the spectrum.