Where Men Can Become Better Gentlemen

Personal Finance: Basics

Mind Not Math

Financial Figuring

Most people believe the key to financial success is being good with numbers e.g. it’s about:

- making a budget and keeping to it.

- having a spreadsheet and spending hours each week working the figures.

- understanding the complexities of annual percentage rates, compound interest etc.

- understanding the legal nuances of the Inland Revenue system and working out the best values to put in the best boxes to pay the least amount of tax.

The reality is many people think managing their finances is too complicated and stop themselves, before they even start. With this mindset they decide not to bother and just let things drift. The reality is, the math is not hard and can be handled easily, one stage at a time. Once you can conquer this mindset you might be surprised at just how simple managing your finances can be.

Financial Planning

So overcoming the fear of numbers and the straightforward math is the first part of mastering your mind. The next part, and the hardest of all, is to overcome your emotions to prevent poor responses to spending. And this is a necessary part of successful financial management! For example:

1. Habit

Always buying a coffee in the morning, when you could make a coffee at home (tasting just as nice, if not better) for half or even a quarter of the price. This is because you stay up too late and thus get up late and don’t have the time or the inclination to make your own coffee. You tell yourself you deserve a store bought coffee when in reality this is just a bad habit you are having difficulty in breaking. Other examples could be: eating at a fabulous local restaurant every Friday night; having access to every TV channel from your local cable supplier; buying a music album every week from the newest band or artist etc.

2. Persuasion

Seeing something for sale that you like but don’t necessarily need and buying it straight away i.e. an impulse buy. You’re drawn to it for numerous reasons: because “everyone else” has one; you’ve seen it advertised and think it’s a good thing to have (the power of marketing); you simply like it and want it; it’s shiny and has lots of buttons and looks cool. You tell yourself you can afford it, need it and want it, when in reality you are simply indulging yourself in something you can’t afford, don’t need and don’t really want.

3. Envy

Your neighbors buy a brand new vehicle and suddenly your 2-year old vehicle doesn’t feel as nice and you’re not as pleased with it as when you first bought it, and now you believe you too need to get a new vehicle. This is commonly referred to as “keeping up with the Jones’s”. No matter how much you have, there will always be someone else who has more (or appears to have more). The list of examples is endless: 2nd home by the beach or hunting lodge on the mountains; vacation to Mauritius or an African safari; upgraded kitchen, bathroom or man-cave; the biggest flat screen TV etc.

Now, you may be reading these lists and be thinking to yourself that having that store bought coffee is not a bad thing, or having a trip to Mauritius is your next planned vacation. And you are right these are in themselves not bad things. The question is are they conscious and planned patterns of spending or are they sub-conscious unplanned spending, rooted in emotional responses.

People in debt; people who live pay-check to pay-check; and people with limited savings and low net worth: are often people who spend according to their emotions rather than to a plan. Even if there is a plan (e.g. a budget) they have difficulty keeping to it because they permit their emotions to get the better of them and spend more than they expect. This is where the mindset can play havoc with your thinking – clearly having a budget is too restrictive and unnecessary, I’m no good with figures etc. There are people who earn 6-figure+ salaries who are still in debt simply due to emotional spending e.g. buy a bigger home, nicer car, more expensive holidays etc.

It’s a case of “curb your enthusiasm” and master your internal thinking to these emotional reactions. You will not always succeed and you will sometimes fail. Do not despair, you will get better at this the more you try, especially if you can see where things went wrong and the true reasons behind it. If you can master your emotional spending you can be in the strongest financial position of your life, allowing yourself to achieve the goals you wish for.

Financial Values

If you want to know what your financial values are in life, then look at your spending levels. If you spend more money on: eating out than you do on groceries; on partying and drinking than on your pension or other long-term savings; or on traveling and visiting places than decorating and home improvement; then these are the things value more.

If you say you value saving to set up a business but you spend your surplus money each month on magazines and books then perhaps you value reading more. In this circumstance one of these items needs to change, to properly align with the reality i.e. stop spending so much money on items to read or redefine your dream/goal of setting up in business. It’s a case of “putting your money where your mouth is,” or vice versa.

If you are not happy financially, you need to identify where you currently spend your money and then adjust accordingly (you may need to include where you spend your time and energy and what your passions are too, to fully realize the scope of the change(s) required. You need to be sure about your financial values in your life and work towards them – and not just do what everyone else around you is doing or saying. The only person you should be competing with is yourself, its hard doing this without trying to out “do” everyone else around you. It’s your successes that matter because they are working towards your financial dreams and goals, no one else’s. It really does not matter if you drive around in a 2-year old vehicle while “everyone else” has a brand new car; your financial values are and should be unique to you. These are what lead into your financial planning, and subsequent budgeting, and may just help in overcoming emotional spending.


When it comes to finances, we seem to have a whole host of mind games we play on ourselves. These poor thinking mechanisms can make us stop moving forward with what we know we should be doing. These are the excuses we tell ourselves and sabotage any chance we have of doing something positive for our financial future. See if you can recognize yourself in any of these:

Big Spender

Any money you have, and money you don’t have (credit), you spend. You have “a Champagne taste but beer pockets” and are surprised to find yourself in deeper and deeper debt. Why think about tomorrow when you can have a great time today, after all you might be dead tomorrow. You can’t seem to get out of this cycle, even though you know it’s bad, and it often results in losing your car, home, partner and family etc. before you finally realize and can come to your senses.


Anyone and anything is to blame except you. You lost your job and blame your ex-boss, the bad senior management of the company, the economic situation of the country, the political leaders of the country etc. You never had the money to go to college and get a good education because… There just seems to be a reason or excuse for everything that happens to you and yes, its true bad things do happen to good people but, start taking responsibility by getting back up on to your feet and make it a personal responsibility to do something about it.


You believe if only you had “x” amount of money everything will be OK. You find yourself looking for ways to make this money with little effort on your part, such as lotteries and get rich quick schemes. Sure some people can get lucky (most of them “lose” their money just as fast by spending it too) but the vast majority of people, with good levels of income and net worth, have worked and continue to work hard for it.


You close your eyes and think everything is OK. You don’t check your bank account(s) and hide bills (by not opening them, throwing them away, putting them in a “cubby hole” somewhere etc.). Doing your finances is boring and tedious, a waste of time. You’ll have plenty of time to sort this all out one day, just not today. Eventually, this day is forced upon you and you muster enough energy to do the minimum and tide you over for a few months before forced to do the same thing again…and again. Planning for the future is not something to worry about today, instead I’ll go and bury my head in the sand.

This is certainly not an exhaustive list but it provides an idea of what we are capable of doing to ourselves, when we let our minds work in a negative way.

Positive Action

It’s not how much you make, it’s how much you keep. If each year you make a salary of $40,000 and manage to save $1,000 during that time, your net worth is $1,000. However, if you make a salary of $80,000 a year and save nothing, your net worth is nothing. If you use your savings to make more money, then you have put it to work for you, and this represents true earnings. As Benjamin Franklin said: “A penny saved is a penny earned.” So, it not what you make, it’s what you’re left with and what you do with it that counts i.e. your savings and net worth.

Keeping your money is about having a long-term plan (gaining financial freedom and peace of mind) versus a short-term spend (gaining a temporary enjoyment). Many people believe this means a miserly life, living frugally, with no fun and no excitement. Well, this does happen if money becomes the be-all and end-all, but with balance it doesn’t have to become anything like that. For most people, being able to save between 10 to 20% of what they make, provides a healthy financial stability. What you achieve is really about creating a suitable state of mind, which all comes back to the values you have and the action you take.

When you make more money (e.g. a promotion at work, additional windfall etc.) you can decide to spend it on frivolous things, on a “bigger” lifestyle or on savings. You might decide to split it into several portions and increase certain parts of your budget with these increases. The financial choices you make, what you think about and then action, are what count – it’s a mindset! The Ancient Greek philosopher Socrates is recognized with this quote “He is richest who is content with the least, for content is the wealth of nature.” And went on to say: “He who is not contented with what he has, would not be contented with what he would like to have.

The secret is to think about and keep your future in mind when you are making your financial decisions. Then find ways to make it happen e.g. automate money to your pension and savings accounts; do not use credit unless you can pay it back in full, when it first becomes due i.e. with no interest payments; change bad habits etc.


If you thought knuckling down, sorting out your finances and creating a budget was a tough nut to crack, in terms of mind set it is only the tip of the iceberg. The real battles in mastering your finances is winning the war against you mind. If you can do this then keeping to a budget will be much easier and the opportunity for a long-term gain in your finances is within your grasp today. Our best wishes for the good fortune that awaits you.

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