Why Is Money So Difficult to Manage?


Money and financial products can be challenging for the average person to understand. Some people find their financial situation so hard to navigate that they undertake courses and contact experts to help. However, it begs the question: why is money so hard to manage? Often, it’s for these reasons below:

Complicated Payment Terms

While some lenders have straightforward payment terms that are easy to understand, that’s not the case with all lenders and financial institutions. A financial product can look straightforward on the surface, but it can come with pages and pages of financial jargon that rarely makes sense to the average reader.

Complicated payment terms can be problematic for people who don’t have excellent financial knowledge. Yet, financial and legal repercussions can sometimes occur if they fail to abide by the terms they agreed to.

A Lack of Financial Knowledge

Financial education, like budgeting and credit scores, isn’t often part of a standard school curriculum. If you don’t learn about money in the schooling system, you must learn about it in your own time. Sometimes, you also learn through making financial mistakes.

A lack of financial knowledge can make money incredibly difficult to manage. You don’t always know about interest rates, the repercussions of not paying your bills on time, or just the basics of money like a savings bank account and your income versus expenses.

Emotional Factors

We don’t always spend money for logical reasons. Money is often linked to our emotions, like greed, jealousy, anxiety, and fear. When our judgment is clouded and our emotions are in play, we can make money decisions that may not be in our best interest.

We may spend money out of jealousy for someone else having something we want. We might even make purchases when we’re sad. Our emotions can undoubtedly make managing money much harder.

Balancing Long-Term Planning and Immediate Needs

Long-term financial planning can involve paying off a mortgage and saving for retirement. We know these tasks are important and can set us up for life. However, balancing these long-term goals with our immediate wants and needs can often be challenging. For example, you might want and need a new car, but know that the money you spend on a car would also help bring your mortgage balance down and save money on interest.

Changes in Circumstances

Many Americans have admitted that they’re one paycheck away from homelessness. As many as 62% of Americans also have no savings to cover unexpected expenses like medical bills and car repairs.

If you lose your job, have unexpected bills, or your income suddenly doesn’t cover your expenses, managing your finances becomes challenging. It’s not uncommon for some people to be unable to make their rent or mortgage payments and utilities before ultimately experiencing homelessness.

A change in circumstances can also go hand in hand with a lack of financial knowledge. If you’ve experienced a drop in income and lack budgeting skills, you might not know how to make your money stretch further.

Money can be tough to manage, whether you live comfortably or not. Our emotions, lack of financial knowledge, and changes in circumstances can all play a part in any financial struggles we encounter in our lifetime.


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