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Unfortunately, we have all come face-to-face because nowadays, a poor financial situation is a struggle many families have to deal with. An enormous percentage of people work endlessly for hours sacrificing all of their free time, and nonetheless, they end up not having enough money to live happily and also incur many debts. Taking this into consideration, we need to ask ourselves: What is the reason behind families ending up in poor financial situations, and what can they do to change it? Financial problems can be the result of many factors, such as insufficient income or bad decisions, but usually, one of the most important-some would say the most important- is the fact that people have wrong, misplaced priorities. Not setting the right priorities affects directly one's financial situation.
People tend to focus on the short term and not the long term and forget about the important and urgent things. More specifically, they spend money on things that should be a lower priority and then find themselves struggling to pay for things that should be a higher priority. For example, they buy an expensive phone although they haven’t paid the rent yet. This behavior, of course, leads to many problems that create a circle of struggle that is almost impossible to break. Let’s provide some examples:
One of the most common mistakes families make regarding their financial priorities is that they spend too much money on food and entertainment. For instance, they pay for media services like cable TV or Netflix or go out often to eat at expensive restaurants, although it would come much cheaper for them if they stayed at home and ate healthy homemade dinner. Many parents spoil their kids by buying them expensive phones and clothes. They never save money in case they have to deal with an urgent, unexpected situation that may require a large amount of money, like medical treatment.
Moreover, families do not spend enough time planning their finances and end up not having a completely clear idea of their debts and how many things they are obligated to pay, like their rent, their loan, or, for example, their kid’s education or medical care.
Another significant result of bad financial management has to be mentioned: children watch their parents’ wrong behavior regarding how they spend their money, and when they grow up, as adults, they end up making the same mistakes their parents did.
If families truly want to escape their bad financial situation, they need to change their mindset, which will result in different, better priorities. They need to understand what are the important things in life and what is not. Paying for your rent, loan, or your kid’s education is much more important than buying an expensive car or phone. We need to remember that things like the latter cannot buy us happiness, and ultimately, spending money on them will create more problems for us than we could imagine. Poor priorities have a direct effect on the financial situation of every family.