Managing Money is Hard

Managing money is hard for a couple of reasons.

Firstly, most of us don't understand what money is and how it works. We don't really understand why pieces of paper have value - many of us still think it's backed by gold. We also don't understand why a random piece of metal aka gold is so precious. We don't understand things like inflation and compound interest. This lack of understanding of money is the probably the biggest reason why we're terrible at managing money. If we don't understand something, how are we suppose to manage it?

Secondly, managing money has more to do with training your brain to think a certain way and less to do with math and numbers. A simple example - everyone wants to be rich and works hard to collect money. But as soon as have some money you spend it on silly stuff. Spending money is the easiest way to reduce the money you have and not get rich. Saving money and not buying stupid stuff should be celebrated, but the world we live is constantly shouting at us, through billboards and social media, for us to do the opposite, thus making it hard

Thirdly, we think of money as an end, instead of a means to an end. Most of us think we'll be happy when we have enough money, which is why we try and save as much of it as possible. However, most people realise much later, that this is not true. I've realised that just like motion, your money needs to be measured relative to something, like you spending. Measuring money in an absolute makes no sense.

And to top it all, we've made money a taboo topic and hence most of us don't even know how bad we are at it.