Money is still a bit of a taboo subject for most people. They would gladly discuss politics, sex, or religion before letting you in on their financial health.
That's why I love the Payday test.
It goes like this. The people who generally have their financial shit together don't usually realize when it's pay day. Those who live pay-cheque to pay-cheque always know, and will remind you as well! I once received an email from a colleague who signed off with Happy Payday!. It's a very telling test.
I use to live like this...no savings...no financial planning. Just waiting for pay day to buy that thing I wanted (what was it again?)
I'm not sure when things changed for me, but it was probably a few years into the work force. I was bringing home about $30K as a Lab Technician, trying to pay down my student loan and buy all those things. I knew what the solution was. I clearly needed a better paying job!
But then I started reading. I began with the basics of personal finance and economics. I thought my research would end there, but I soon found myself examining my lifestyle choices. What the hell was I buying? Why did I need these things. How much had I been seduced into the consumer lifestyle? What really makes me happy?
So what started as a desire to understand money quickly escalated into some pretty big life questions. Until you can truly understand why you need that iPhone, you'll never be able to apply money management skills to your life.
Learning personal finance is easy. Applying it and breaking free of a consumer-driven lifestyle if hard.
By all means, go out there and learn about stocks, bonds, compound interest, inflation, business cycles, index funds, etc. Then you'll know how to get your money to work for you.
But now you need money! And there are only two way to get it. Get paid more and/or spend less. Guess which is easier? Well, spending less is easier, but not easy. It's going to force you to face yourself and ask those big questions about your lifestyle and what ultimately makes you happy.
So where do you start?
The first step is to hack your monthly expenses. Be ruthless about everything. Do you really need cable? Hell, do you need a TV at all? Try an experiment. Box up your TV for a month and see if you miss it. Stop buying books and get a library card. The first books you take out can be on personal finance. Get into every single expense and figure out how to reduce or eliminate it. Run little experiments and see if you really need this stuff. Small sums add up quickly when they are being drained from your account on a monthly basis.
Alright, let's go one step further. Do you live within biking distance from work? No? Then move closer to work. This has three huge benefits. You save money on gas, you save time since you're no longer stuck in traffic for 2hrs a day, AND you're getting fit in the process! WIN, WIN, fucking WIN! This single action will make a massive change in your life.
Overtime you'll start questioning every purchase, watch your savings grow, and one day you'll wake up and realize that you have no desire to spend...and that this brings you enormous happiness.