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The everyday hardships of conscious finances – Andrej Sztojanov

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People tend to think about finances as an abstract thing. As a theory about how to invest money in the best possible way. What they often forget is that it’s so much more than that. It’s more of a way of living and thinking about every decision we make.

Some time ago I read an interesting article about the worst financial mistakes first-time moms make. At first sight the text has a strange notion, but the article has a very important point: even everyday decisions made out of love can be seen as financial mistakes.

As a father and a financial expert the article reminded me again how complicated finances really are. It’s good to have a solid investment plan on the medium and long-term, but these are influenced by the small decisions we make.

We can buy everything to our children, but then we will have less to save and invest, which hurts our finances. That means it hurts us and our children. A very strange circle: giving everything to someone we love can actually hurt them.

Of course I’m not saying that we shouldn’t buy things for our loved ones. Money isn’t the purpose of everything, so we shouldn’t just gather it for its own sake. The problem is overspending on things we don’t really need. This is what the women surveyed did.

As MarketWatch put it: 40% of first-time moms were “overspending on non-necessities like clothes, toys and gadgets”. Some moms didn’t realize how their life changed and 16% of them “continued to spend on non-necessities like restaurants, self-care and new clothes like they did before they had a child”.

Buying things to a newborn and spending on ourselves isn’t a mistake on its own. No wonder a quarter of moms said they didn’t make any. But 15% said that “they should have saved more for a college fund”.

I believe that’s where mistakes show themselves. Buying something unnecessary with money that we should have saved up. Every financially savvy people should have clear budgets every month: this amount can be spent on this and that; this amount must be saved; this has to be invested.

When people break those boundaries to do unnecessary things which can even hurt their long-term plans, that’s a mistake. A mistake that’s super easy to make as a parent.

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