Why you must take control of your finances

I’m going back to basics today. I’m going to look at why you should take control of your finances, rather than offering tips on how to achieve this.

It’s all very well saying ‘this is how to take control of your pension’ or ‘this is how to create an emergency fund.’ I could even say ‘this is the easiest way to invest,’ but why would, or indeed should, anyone listen if I don’t first address why it is important you do these things?

Take control of your finances and make money something to celebrate rather than fear

In this post I will offer five reasons why you should take control of your finances. I will also share my own personal reasons for taking control. I speak a lot about transparency on this blog and don’t want to be a hypocrite, so feel it is only fair that I share my own story.

This post will cover:

  • My own ‘why’
  • Financial inequality
  • Providing for loved ones
  • Preparing for an emergency
  • Achieving your dreams and goals

My own ‘why’

When asked why I started this blog, I usually say: “I’ve been a financial journalist for over two years and I’ve learnt so much about finance I wouldn’t otherwise know. I wanted to share these tips and tricks with others to help them benefit too.”

None of this is untrue. But, being in control of my finances also means a lot to me for more personal reasons too.

In my final year at university I became very ill with glandular fever. I was effectively bed bound for the best part of six weeks and, even after this period, was left significantly weaker. I couldn’t even walk to the corner shop at the end of the road without stopping to have a rest. This continued for months on end, resulting in me extending my degree and moving back home while I finished it.

During this time I was also seriously bullied. This made my, already lowering, self-esteem virtually non-existent and lowered my sense of self worth hugely. The specifics aren’t important, but the feeling of vulnerability has stayed with me ever since. Being in control and able to provide for myself has made me feel stronger and helped restore my confidence.

Why I want to take control of my finances

After university

Extending my degree also meant I couldn’t start work as planned. I moved back to my parents and they provided for me, but I still wanted my own money for personal expenses. This led me to taking a job in an ice cream shop (in winter), which turned out to be a fantastic experience. It taught me many lessons – even if I was only paid £7.05 an hour!

I am incredibly lucky to have a very supportive family and friends, who were invaluable during this period. Fortunately, I never had to worry about having a roof over my head or food in the fridge, as I was always welcome in my parents’ home.

However, I did experience what it felt like to feel very vulnerable. I also remember how uncomfortable seeing my bank balance hover under £100 made me feel. I don’t want to find myself in that situation again.

Financial inequality

Wealth inequality is increasing at the moment. Forbes’ annual ranking of the 400 richest Americans found the US’ three richest individuals (Bill Gates, Warren Buffett and Jeff Bezos) collectively hold more wealth than the bottom 50 percent, which equates to 63 million American households.

Women and people of colour are more likely to be affected by this issue, which adds to the inequalities minority groups already experience.

You cannot change the world by saving into a pension. But, you can lower the gap by maximising your wealth and making your pay cheque go as far as possible. Taking control of your finances can give you more wealth than you thought possible and protect yours and your family’s future.

I address these issues in more detail in this post.

Providing for loved ones

Your finances don’t just impact you. Even if currently you’re single or don’t have dependents, this can change in the future. Regardless, there is probably at least one person you care about and would like to be able to provide for if possible.

Providing for children is the obvious option, as it’s well documented how expensive children are. However, perhaps you also want to consider if you could provide for your partner or spouse if something were to happen to you. What if one of you was suddenly unable to work? Would you be able to support each other for a period of time?

There may also come a time where you need to be able to provide for your parents. Care costs can be expensive or perhaps you want to pay off their mortgage so they can retire comfortably.

Whatever your personal circumstances, there are plenty of reasons why taking control of your finances could benefit both you and your family and allow you to provide for them if necessary.

Preparing for an emergency

There’s a belief that we are all only one crisis away from homelessness or bankruptcy. A recent article in The Guardian highlighted this, where a woman described her transition from earning over £100,000 a year to relying on Universal Credit.

One of the particularly striking elements of this piece is the empathy the woman feels. She understands she’s been living a life of privilege and luxury while others have been struggling in her current state for years.

But, it doesn’t have to be this way. You can’t protect yourself from every eventuality, but you can be as prepared as possible. Simple steps, like clearing debts and creating an emergency fund, can give you added security and peace of mind in the event of an emergency.

Be prepared for any unexpected bills that may come your way

Achieving your dreams and goals

What’s the one thing you’d love to do or achieve? Whether it’s buying a house, writing a novel or travelling the world, the one thing most dreams have in common is that they require money to fund them.

Taking control of your finances will allow you to turn these dreams into reality. Hopefully it will allow you to live the life you want to, rather than becoming stuck in the cycle of always waiting on your next paycheque to arrive.

If you found this post interesting, please like it and share across social media or send it to your friends. I’d also love to hear your thoughts and experiences, so please do leave a comment! Has this encouraged you to take control of your finances? What are your reasons for wanting to be in control?

7 responses to “Why you must take control of your finances”

  1. I love this! I’m not earning a lot at the moment but I have about a year’s salary saved up (it took six years though). I’m saving for a wedding, my teacher’s diploma, and moving overseas. So, I have a lot of motivation to look after my finances.

    Thank you for this post.

    All the best all the way from South Africa, Michelle (michellesclutterbox.com)

  2. A Sustainably Simple Life – British Columbia, Canada – Sharing our journey living sustainably on a budget.

    I love this! I’m an advocate for people taking control of their finances too. For me, I find I have more freedom when I am in control of my finances because I’m aware of how the choices I make will impact me. It’s also the only way I can truly prepare and plan for the future. Thanks for sharing your journey and your reasons too 🙂

  3. A Capone Connection – Georgia, USA – I'm passionate about travel, and would like to utilize my travel experience to inspire and connect with others.

    Lots of great information and good point here. I like to save for my loved ones. I don’t have grandchildren yet (my kids aren’t even married) but someday I know that I will and I want to be able to do special things with them. I am saving now so I can be the kind of grandmother I want to be in the future. Thank you for the inspiration and the encouragement. It’s empowering to be a woman who supports herself.

  4. Hi Katie. Thanks for sharing your story. My motivations were twofold: 1. I hate being in debt – and this includes a mortgage. I realised that we’d be waiting a long time to buy a house without a mortgage so we did get one but I made every effort to pay it off as early as possible. 2. I work to live, not live to work. Consequently, from an early age I started putting money into a personal pension. Mssrs Gates, Buffet, and Bezos are never going to be envious of my pension fund but it will be enough for me and my wife to live on without having to work into our 80s 🙂

  5. Daniel Durham – United States – Hello, Having gone through financial hardships myself, I can empathize with people going through the same types of experiences as I did. The reason I created Refresh Financially is to offer the guidance and education to those in need that I never had when I was starting over. Many people have no idea where or even how to start building wealth. My goal is to change that and help as many people that I can to build a financial foundation and journey forth to success. Please take a moment to visit www.RefreshFinancially.com and let me know what you think. Thank you for your time.

    Hi Katie, I’d like to add one more for you if I may. To achieve financial freedom over time. The value of compound interest is an amazing thing, and by starting out as early as possible it makes a huge difference as the years pass by. I’m so happy for you to be focusing on your finances at your age because I didn’t and wasted too many opportunities to count as a result. Unfortunately for many, they don’t focus on taking control of their finances until an unexpected crisis occurs.

  6. Michelle (Boomer Eco Crusader) – Canada – Hi there! I’m Michelle and I live in Kitchener, Ontario, Canada. I am married with two young adult daughters. I’m a big fan of reducing waste, using less plastic, decluttering and simplifying life as much as possible.

    Excellent post Katie. It’s so important to address the why. I think it’s great that you share your personal story.

  7. Another brilliant blog Katie. I’m so pleased our paths have crossed.

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