We are aware of and care about a lot of things in life big and small like how we look, carry ourselves, dress, act, etc. But are you aware of your financial situation? You can’t possibly talk about adulting without talking about money, which is the point most of us are in life. But do we really know the full picture of our money or just what we spend?
Disclaimer: This post is not to judge anyone’s employment status or lifestyle choices. After all, living a LUXE life is living one that you enjoy, which means on your terms.
This is the last of the “Tap In” series. I’ve really enjoyed picking the topics and putting this series together because these really exemplify the basics needed to build yourself up in preparation to live the life you dream of. I chose to do this one last because I didn’t want to put too much emphasis on money and don’t plan on teaching you how to get your finances in order in this post. I definitely find it to be very important in my life, but it’s one of those topics that is subjective, especially as it relates to our definition of living a LUXE life. Make sure you check out all the topics from the series when you get a chance!
Tap In with TheLuxeDocs
- Confidence- How to: Confidence Basics 101- Action Confidence
- Intention- How to: Moving with Intention- Purposeful and Successful Living
- Goals- How to: Goal Planning- A Key to Life
Let’s rewind a little. In the original disclaimer I used the phrases “employment status” and “lifestyle choice.” These two go hand in hand as they affect each other, but lifestyle choice gets a little more detailed. Your status can be employed, self-employed (entrepreneur), or unemployed, but your lifestyle choice includes the why. You could be choosing to work because you want to (enjoy the work or want to pass the time) or because two incomes are better than one and that’s best for your household. You could be choosing not to work because your partner is the financial provider, you stay home with the kids, or you simply just don’t want to. Either way, these two phrases may affect whether you’re currently aware of your financial situation or not.
Now, if your situation is not joint with anyone else’s, then there’s no excuse to not know your financial situation. If that is the case, you are setting yourself up for failure and need to check out “5 Easy Ways to Manage Adulting as a Millennial.” Check out and save the quick LUXE List on TheLuxeDocs Instagram as well so you can circle back to and reference it. And by joint, I don’t mean you share a joint bank account with someone (even though that would be more of a reason to want to know what’s going on with the money). By joint I mean either your finances alone don’t cover your costs of living, or your finances are not involved at all. The latter is where it gets tricky.
The purpose of this post is to explain the importance of being aware of your financial situation. This post is not to teach financial literacy or preparedness. Its purpose is to raise awareness of the importance and hopefully give you a way to alleviate financial worry to fully enjoy your LUXE life. After all, living a LUXE life doesn’t mean forgetting or ignoring issues to live in and enjoy the moment as they continue to grow. Because one thing about issues is they don’t go away or lessen with time whether your concern about them does or doesn’t. The snowball effect is real.
Now let’s get into it!
During the time leading up to writing this blog post, I came across two Instagram posts that closely tie in with this topic and really made me think. Now I can’t say that the information was factual because I didn’t follow up by doing the research to be able to verify or produce any stats, but they definitely made sense.
One of the posts was a thread of tweets from a guy. One of the first tweets in the thread said something along the lines of this being the first time men have had to actually be liked by women. My first thought was “With the exception of gold diggers, men have always had to be liked by women.” Then boom! The facts (for lack of a better word because remember I didn’t do the research and there were no references) followed. The following tweets talked about how in the past women were more dependent on men so they may not have been there because they liked the man but because they needed a man for pretty much everything in life.
The other post was a thread of tweets from a financial advisor that discussed an article she read on the declining divorce rates and how they’ve reached a record low, but that “gray divorces” are increasing. According to her tweets, “gray divorce” is divorce amongst couples that are age 50 and over. She mentioned that this increase is due to postponement with one of the various reasons being financial stability. She also noted that we’re only two generations removed from women getting “fair” access to financial resources and that it could indicate women over 50 finally feeling financially stable enough to leave unhealthy marriages.
Imagine having to be in a situation because you have no other option. Imagine divorce being on the table and all you can say is, “I get half of everything,” but not even knowing what half is. Now imagine being able to make the decisions that are best for you in any situation because you are aware of your financial situation. I’m not saying you have to be the breadwinner or making any at all, but just be aware.
ARE YOU AWARE?
Reasons people may be unaware of their financial situation include not being the person that manages the household’s finances, not being a contributor to the household’s finances (child, unemployed adult), or simply not being interested. As I stated many times thus far, it is important to be aware.
If you aren’t a contributing member of the household’s finances or aren’t the individual responsible for managing those finances, the most important reason you should be aware of your financial status is for emergency purposes. If anything was to happen to the individual that does manage them, are you prepared? And being prepared doesn’t necessarily mean prepared to take over the payments even though that may be beneficial. It also means knowing how to access money put away for emergencies (who to reach out to, usernames, passwords, etc.), knowing the accounts that need to be kept up and how to do so, or even who money is owed to and how it will be collected (wage garnishment, etc.)
BENEFITS OF KNOWING YOUR FINANCIAL STATUS
You can’t go wrong with knowing your financial status. The only downside may be knowing the ugly truth, but ignorance is only bliss until stuff hits the fan.
- Preparedness
I won’t go back over everything already discussed, but as mentioned earlier, being prepared in emergency situations is important.
- Alleviation of worry
Being aware of your financial situation may provide a feeling of financial security or stability. Knowing doesn’t mean your situation will be good, but it allows you to not be caught by surprise. It also gives you time to handle things. If you’re aware of a financial issue ahead of time, you have time to think through it, set up payments, and at least try to rectify. If you’re caught off guard, it can leave you frazzled, unable to think clear, and possibly at a loss if you don’t have enough time to rectify.
- Being able to live more financially responsible
When you’re aware of your financial status you’re able to be financially responsible. Of course doing so is a choice, but you don’t even have that choice if you’re unaware because all you know is the part you play. Yes, being financially irresponsible can be an accident if you’re not familiar with the whole picture. You may think your spending is low, but if you don’t know the monthly income, how can you really know. Being aware of your financial status also allows you to budget more realistically or do so at all or save and reallocate funds as needed. Most importantly, it enables you to live within your means. It may seem fun to just live life spending without a care as if everything will always be okay. And okay, it may be, but if the breadwinner’s financial situation changes for the worse, this can present many problems.
- Being able to have a say in financial decisions
The financial decisions made in your household affect you whether you contribute to the income or not. Being aware allows you to present a sound case in financial decisions that affect you whether you’re for or against them. It’ll also help you plead your case for the extra money you want allocated to your frivolous finds and personal outings.
Now this does get a little tricky as stated way back in the beginning of all of this. The breadwinner may feel that you shouldn’t have a say so if you don’t contribute to the income or they could just not want you to “worry your pretty little head” about it. Either way it’s important to be aware. If you come across this obstacle, try letting your partner know that its for preparedness and emphasize that you guys are a team regardless of how each of you contributes. Check out “Love & Money: How to Purchase Large Assets and Liabilities with Your Partner” to see safe ways to make financial decisions with your partner.
You have to know that no one’s money is endless nor financial status protected by the “grandfather clause” no matter the occupation. You can rack the money up, but if you’re spending at a high rate and not considering the ratio of what’s going out to what’s coming in, hopefully someone else is and has the say so because you won’t know when to slow down or stop.
Now I’m not here to teach you financial literacy because I’m no guru and am still learning… even though I could teach you a few things as I’m on a journey and have done well thus far, but the point is to be aware.
This post doesn’t touch on the importance of financial literacy, importance of financial preparedness, the benefits of more than one income, or the benefit and importance of women having their own regardless of their relationship status even though all of the above would aid in preparedness and emergency situations. Those are all important but separate topics and trying to mash them all into one would result in a lot of information being left out. I also wanted to focus on the importance of awareness without suggesting one financial lifestyle choice may be more secure than another. I also didn’t want to put such a heavy emphasis on money alone because money doesn’t equal happiness even though it can create a sense of stability, security, preparedness, and or freedom. It all depends on how it fits into your life. For some, it may not represent any of those things. If you live a life tied to money, which most people do because they don’t grow their own food, make their own clothes, live without electricity or self-constructed systems to provide electricity and water, it is a factor. However, money shouldn’t control you.
And remember…
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