Real Life Money

Money is not just about numbers; it’s about stories, emotions, and sometimes, even shame. How can understanding these elements help you regain financial control?

1. Lack of Financial Education Leads to Poor Money Management

Many people struggle with finances because they grow up without learning the basics of money management. In the UK, there are no mandatory financial education classes in schools. Students leave for work or university with little understanding of concepts like savings, mortgages, or debt.

This void is often filled by parents, but it is a lottery. Not all families have the knowledge to pass on financial wisdom. The author, for example, recalls how the only money-related lesson she got in school was from a teacher bragging about exploiting a credit scheme. This left her unprepared to handle financial challenges in adulthood.

The broader economic context adds to the problem. Since the 2008 economic crisis, precarious jobs and stagnant wages have made saving harder for young people. Many of them find themselves in situations where paying rent alone is a struggle, let alone setting aside funds for emergencies.

Examples

• UK schools offer no structured financial education.
• Parents may lack the knowledge to teach financial skills.
• The 2008 crisis and austerity measures exacerbated financial struggles for young adults.

2. Shame Is a Silent Barrier to Financial Recovery

Emotions play a big role in money matters, and shame is often at the helm of financial issues. People facing financial problems frequently hide their struggles. They avoid looking at bank statements, ignore calls from creditors, or bury bills under stacks of magazines.

The author shares a deeply personal story about spending £10,000 of inheritance money on a trip to Bali. For years, she felt ashamed of her decision, which compounded her inability to talk about it or learn key money lessons. This type of secretive behavior keeps many stuck in a cycle of financial pain.

Opening up about financial mistakes is the first step toward healing. By sharing their struggles, people can relieve some of the psychological burden of debt and even discover that their reactions are not uncommon under stress.

Examples

• People often avoid financial realities due to shame.
• The author felt years of guilt for spending her inheritance irresponsibly.
• Sharing financial struggles eases shame and offers a path to accountability.

3. Social Media Can Worsen Financial Woes

Scrolling through social media, which showcases glamorous lifestyles of others, can make people feel inadequate. For some, this prompts reckless spending in an effort to replicate the curated online images.

During maternity leave, the author fell into the trap of trying to redecorate her home to match Instagram-worthy aesthetics. This spending spree worsened her debt, and she later realized how damaging the illusion of social media perfection could be.

Taking a step back from social media helps individuals reconnect with their own values and prevent impulsive spending. Asking yourself whether you’d trade everything you have for someone else’s life can also offer perspective.

Examples

• The author fell into debt trying to mimic Instagram trends.
• People's insecurities are often triggered by idealized online images.
• Stepping away from social media can reduce spending pressures.

4. Gender Inequality Worsens Financial Hardships

Women face unique financial challenges that make managing money even harder. In the UK, the majority of those struggling with debt are women. Unequal pay, the high cost of child-rearing, and "pink taxes" on female products add to these burdens.

The gender pay gap has remained stubbornly wide, largely because of a lack of openness about salaries. Motherhood amplifies the difficulties women face. Paid maternity leaves often don’t meet basic living expenses, and returning to work more flexibly can hinder career advancement.

The statistics are stark. Annually, tens of thousands of British women face workplace discrimination simply for being pregnant. This systemic inequality highlights the need for societal shifts in how women’s financial realities are managed.

Examples

• Women make up 64% of the UK’s debtor population.
• Pink taxes increase the lifetime cost of female products like razors and menstrual items.
• 54,000 women lose jobs annually in the UK due to pregnancy.

5. Millennials Struggle to Join the Homeownership Club

The dream of homeownership is increasingly unattainable for millennials. High rental costs, stagnant wages, and expensive housing have turned owning property into a distant aspiration for many.

The author explains how government policies, like the removal of rent controls in the 1980s, made homeownership the ideal while pushing rent prices up. For millennials today, this legacy creates pressures to "keep up" by pursuing homes they cannot afford, draining finances further.

With renting often being the only option, there’s value in adapting one’s mindset. Interior designers like Medina Grillo suggest personalizing rented spaces to create a sense of belonging, even if it means stepping beyond rental restrictions.

Examples

• Homeownership rates for millennials are far below their parents' rates at the same age.
• High rental prices hinder savings toward a home deposit.
• The author suggests focusing on making a rented space homey instead of dwelling on ownership.

6. Goals Provide Direction on the Path to Financial Stability

Setting clear goals offers a way out of chaotic finances, but these goals need to align with what truly makes you happy. Many people mistakenly think buying things will lead to big life improvements, only to feel unfulfilled after the purchases.

The author describes outlining her dreams in detail, like owning a safe and stable home for her family. Connecting these goals to long-term happiness helped her re-prioritize spending. By breaking the big goal into manageable steps – like reducing debt or setting savings rules – she gained clarity and direction.

Smaller milestones, like having no-spend days or preparing packed lunches, are stepping-stones to larger financial targets. Each small win builds momentum.

Examples

• The author prioritized buying a home for family stability.
• Breaking goals into smaller steps helped her stay focused.
• Identifying values, like safety or mental peace, makes goal-setting effective.

7. Budgeting Is A Strategic Tool, Not a Restriction

Budgeting often feels restrictive, but it’s an essential tool in reclaiming financial stability. The five-step method outlined in the book offers a clear path toward setting a reliable budget.

The first step involves analyzing six months of past spending to identify patterns. Then, fixed costs, like rent, are separated from nonessential but enjoyable costs. The author advises trimming variable expenses, such as groceries or transportation, to make room for savings or debt payments.

Creating this detailed framework allows for flexibility based on individual priorities, helping people balance saving with enjoying life in the present.

Examples

• Reviewing six months of expenses helps identify spending habits.
• Separating fixed costs from optional expenses clarifies financial priorities.
• Trimming non-vital expenses can free up funds for financial goals.

8. Living Frugally Can Bring Unexpected Joy

Frugality isn’t just about cutting back – it changes how you view life. The author discovered that frugal living often enhances appreciation for experiences over material goods.

Shopping secondhand for quality furniture or clothing is one way to maintain a stylish and eco-conscious lifestyle on a tight budget. Instead of splurging on products, the author suggests cultivating meaningful experiences, such as picnics, museum trips, or nature walks. These activities cost little but offer lasting satisfaction.

Moreover, adopting a frugal lifestyle can also inspire others. Being open about financial challenges turns money discussions into opportunities for community support, reducing shame across the board.

Examples

• Thrift stores are affordable sources for unique, quality items.
• Experiences like swimming in the sea are more fulfilling than material purchases.
• Sharing the benefits of frugal living influences others positively.

9. Materialism Isn’t the Only Way to Show Generosity

When finances are tight, people sometimes feel they can’t express generosity. The author challenges this by emphasizing that time, attention, and thoughtful actions are often more meaningful than material gifts.

Instead of expensive items, she suggests writing letters, offering companionship, or preparing meals for loved ones. These acts foster deeper connections without adding financial strain.

Generosity, even during lean times, helps diminish the shame linked to financial struggles. It emphasizes the value of human connection over material ability.

Examples

• Personal letters can be more heartfelt than store-bought cards.
• Cooking dinner for friends offers meaningful time together.
• Offering someone undivided attention is a priceless gift.

Takeaways

1. Redefine Your Budget and Goals: Review past spending and set both short-term and long-term objectives that align with your happiness. Assess these goals and decide which bring real value to your life.
2. Step Away From Comparison: Limit exposure to social media or other platforms that might spur unhealthy spending habits. Focus instead on experiences and activities that bring lasting joy.
3. Be Open About Finances: Share your struggles and successes with trusted people. It will create a supportive environment and help dispel shame about financial issues.