Posted by Allison on 4 April 2009, 10:08
From the moment you first got a shiny new coin in return for a tooth falling out, you started to form ideas and opinions about money, whether you realised it or not.
Even as children we start to gain an understanding of money and currency and the way it is used in our lives. We learn about different countries using different currencies and when we go abroad we get to see different banknotes and coins worth entirely different amounts to our own.
We also learn from other sources, but the overall effect is the same – it all comes together to give us our attitude towards money, and that attitude forms the habits that can stay with us for life.
So what are your own money habits like? If you get some unexpected cash arriving in your life, what do you do with it? Do you spend it because you weren't expecting it and therefore it is essentially bonus money? Do you save it because you know that it will come in handy at some point in the future? Or do you use it to help pay off a bill or a debt you owe? Some people would even split it three ways and do a bit of each!
So what would you do? Your answer is largely formed from the information you gathered about money when you were a child, and that information can come from a variety of sources.
Firstly and perhaps most profoundly, there is your parents and the rest of your family. If your parents were good with money and never got into debt the chances are that you will follow the same pattern. If they did get into trouble with money however, then you may well follow that pattern instead.
Much of what we learn – for good or for bad – comes from around us, our immediate environment and the people within it. If we are taught about the idea of different people in different countries using different forms of currency then we are much more likely to be more interested in it and understanding of that fact when we become adults.
We will also have a better understanding of the fact that different currencies can buy more or less items of food and clothing, for example, than they would in other countries. Money certainly goes further in some places than others, no matter how far we may try to stretch it ourselves.
But what of the way we actually treat money ourselves? How good are you at spending or saving? Do you make sure all the bills are paid before spending anything on yourself? Do you think about saving money each and every month – or do you actually do it?
Whether we like it or not money is essential for giving us what we want and need in life. We all have our own unique views of it but it serves a similar role for many of us. There is no doubt that some people are more responsible with money than others, and some people are also better at making it go further than others. It's all a question of our upbringing and how it affects us as adults.
But even if your own money habits aren't as good as they could be you can still change them into better ones.
The key is to look at how you think about money and work out where your weaknesses are. If you know that you start spending as soon as you get paid and worry about the bills later, you should take the time to set up direct debits for all your bills to come out of a separate account. Work out how much you will need to deposit in that account every month and make sure that amount goes in as soon as you get paid. That way, you will know that whatever you have left in your original account is yours to do with in whatever way you like.
Constantly living in the red is something that a lot of people in a lot of countries can identify with, regardless of what currency they are using. If you are in this situation you tend to have a very different view of money than the one you would have if you had a lot of money stocked away to protect you against anything that may happen in the future.
Most of us have been in the situation of having very little money to play with. If something goes wrong in your home that needs fixing it's an immediate worry if you don't have the funds to pay for it. Whereas if you have got savings and your current account is in the black, it's not a worry if something goes wrong because you can immediately arrange for a replacement or repair.
So whether we like it or not the existence of money and currency has a profound effect on our lives. But that is why we should make the effort to understand it more than perhaps we do. After all, we can make more money with the money we have if we learn how to invest it properly, and there are plenty of people who make money from money itself, thanks to the money markets which pitch different currencies against each other and make profits from the rise and fall of each one.
So it's worth paying attention to how you deal with money, because the better your attitude is towards it the more money you are likely to amass during your lifetime. Remember that your money habits will lead directly to how much or little money you have, so take a good look at them now if you don't feel you have enough money to get by on. It's only by taking charge of your habits that you will be able to change your future and be in a better financial position for the long run.
And that applies whichever country you live in, and whatever currency it uses.