Basic Principles of Money Psychology

[Suba]

People have various ways to improve their financial literacy, but in fact, the success of managing finances and investments does not always depend on mastering financial material but rather on psychology such as behavior/habits, emotions, etc. According to the book Psychology of Money, written by Morgan Housel, no matter how smart we are in calculating financial plans and the various financial degrees we have, if we are not psychologically qualified, then our finances are also not effective. Children who grow up in poverty will always think about risk and return, which is often not understood by the child of a rich banker. The most basic principle of financial psychology is that we must be able to meet all our needs with our income, meaning not living extravagantly, expenses must be less than income, so that we do not need to go around looking for debt. In addition, if we have invested in property, blue chip stocks and Bitcoin, we do not need to panic when prices fall, and do not sell/cash in investment instruments.

 

[Trush Jodie]

When our mindset is in the direction of poverty, we would not advance financially no matter the money that enters our lives.

 

[Augusta]

There's need to improve our financial literacy . We could Subscribe to financial newsletters. Listen to financial podcasts. Read personal finance books to keep up with financial demands.

 

[pousinha]

The best thing to begin is growing up in a family of serial savers rather than in an extravagant family. Unfortunately, besides me, my mother's family noticed that a lot of people living in poverty have the habit to lavish the little money they earn (usually into parties and shopping malls or buying a car they can't afford). They live as if there were no tomorrow.

 

[Suba]

The best thing to begin is growing up in a family of serial savers rather than in an extravagant family. Unfortunately, besides me, my mother's family noticed that a lot of people living in poverty have the habit to lavish the little money they earn (usually into parties and shopping malls or buying a car they can't afford). They live as if there were no tomorrow.

I have encountered many cases where people who were once poor after working, getting married and having children, then spoil their children, all their wishes are granted, the children become wasteful, so that when they grow up, he/she will find it very difficult to manage their finances.

 

[Fidelia]

The best thing to begin is growing up in a family of serial savers rather than in an extravagant family. Unfortunately, besides me, my mother's family noticed that a lot of people living in poverty have the habit to lavish the little money they earn (usually into parties and shopping malls or buying a car they can't afford). They live as if there were no tomorrow.

I rather think the best thing is to grow in a family that people know how to earn money and manage it. That would help build financial knowledge nree.

 

[pousinha]

I have encountered many cases where people who were once poor after working, getting married and having children, then spoil their children, all their wishes are granted, the children become wasteful, so that when they grow up, he/she will find it very difficult to manage their finances.

It's very common, nowadays, to spoil one's children. Videogames becoming a must to have and these gadgets use to cost an arm and a leg.

 

[Kera]

It's very common, nowadays, to spoil one's children. Videogames becoming a must to have and these gadgets use to cost an arm and a leg.

Parents have a big role to play to ensure that their kids are given financial education regardless of their financial background. It really does contribute to building a person that is sound financially.

 

[Suba]

Parents have a big role to play to ensure that their kids are given financial education regardless of their financial background. It really does contribute to building a person that is sound financially.

From several articles that I have read, parents who have childhood experiences in financial difficulties, after working and having children do not want their children to feel inferior in school and the environment or with their friends, so these parents spoil their children, and give them whatever they want.

 

[pousinha]

That's the reason nowadays is pretty impossible to see even a kindergarten child who doesn't own a mobile. I also see babies 10 months old owning a mobile (well, until the mobile is used to study, what for a baby means to watch cartoons in a different language or listening to literature for toddlers, that's great). But in these cases, parent's supervision is necessary to find the right studying programs that fit babies. Otherwise, they'll usually end up playing inconsequent games. In this latter case, a mobile given to a baby represents lavished money.

 

[Starmix]

The basic principle of money psychology revolves around understanding the interplay between our emotions, thoughts, and behaviors regarding money. It is not just about the numbers, it is how we feel about money and how those feelings drive our financial decisions.

 

[Augusta]

I rather think the best thing is to grow in a family that people know how to earn money and manage it. That would help build financial knowledge nree.

That's right such an environment is a learning one for up coming children. They learn how to make money on their own