Financial Difficulties

Finance is a huge part of our life that everybody hope to be in good financial state. However, today, more than ever before, people are struggling with financial problems. According to a research conducted by AC Nielsen and ANZ in 2005, people often display six ways of thinking considered “unhealthy” that putting people under financial pressure including ‘living for today’, ‘financial disengagement’, ‘aspirational’, ‘emotional enhancement’, ‘ownership of credit’, and ‘credit as supplementary income”.

Firstly, the prominent idea is “living for today”. It means that people just think and spend for their present lives, and do not pay much attention for their future. This way of thinking has a close connection with the “ youthfulness” or the current young generation as they suppose the most important thing to fulfill the emotional life. They often to hang out for shopping or having party with their friends as there are some who think they might die tomorrow. That why they have to enjoy; and live like that day is the last day of their life. While the youth strongly represent this unhealthy thinking, family is also found in this group. For example, a mother with a low income level might think her family is never to become rich; therefore, she must enjoy the moment. One more reason, some fluctuated income people are going to spend more today as they might receive more money in the near future. Unfortunately, they might never think of being in unexpected circumstances. Take illness or the death of the family member as an example. It is likely that they are unable to handle this situation. In fact, this way of thinking definitely triggers negative effects on people’s lives in the long run; hence, people must learn the way to draw out financial plan carefully to be always in safe.

Secondly, ‘financial disengagement’. Who are mentioned themselves are not kind of “financial minded” and don’t care much about their spending. They are seen as unorganized or easy going people. Similarly to “ living for today” thinking, they put financial issue at the bottom of their perceived value and living for emotional and spirit fulfillment. There are some who have a good job with middle-high salary, they don’t think they need to worry as they can afford to pay their debts soon. They never thought of being in emergency such as they might lose their job or in case they get divorced. I myself experienced a hard time at my first year at my university living far away from my family. Lacking financial management skill, I just spent and bought everything I like without thinking about, managing, and tracking my expenses. As a result, I went out of money soon and cannot afford to necessary things after that.

3. aspirational’: – spending to “keep up with the Johnes’ meaning a person is easily want to have the things that others have. He/she is likely to be influenced by others or environment. For eg: A Single Mother, Sally, lived in Rural for a long time, after that she move to the town near her daughter’s school. She start to wanting and needing more material things to fulfill her large house. Then she gradually buy more items. Consequences: they might buy the things that they do not really need. The ‘aspirational’ way of thinking is where people had a particular aspiration that strongly influenced their xpenditure. The unhealthy spectrum of this way of thinking was where this dominated, to an extent that it translated into over-spending and/or over-commitment. Common colloquialisms that people used to describe this way of thinking included ‘keeping up with the Joneses’ and ‘champagne taste on a beer budget’.

4. emotional enhancement’: described themselves as ‘impulsive’, closely related to mood state. there appeared to be a trend of using ‘material goods’ to manage emotions, especially negative thoughts. Eg: a single mother “ I think a lot of it had to do with depression.

I’m being treated for my depression with antidepressants and I feel so much better now”. Consequences: our spending might exceed our financial ability. In that case, buying are not help to feel better but put us to another worries related to finance.

5. ‘ownership of credit’: – over time an attitude of ‘it’s my money’. They fail to differentiate their money and the thing they perceive as a debt to a lender. ‘You get a false idea of your financial situation… Because you are feeling like it’s your money and in actuality you are using it before you actually pay it. ’ Single Mother, 5 Children.

6. Credit as a supplement income way of thinking: