Chances are you’ve heard the adage, “When you assume, you make an “ass” out of “u” and “me.”
While this saying has many connotations, most have to do with personal interactions and communicating with other people.
But what about when it comes to our finances?
There are a myriad of reasons why you shouldn’t made assumptions when it comes to your money. There are also a lot of negative consequences that are a by-product of the following assumptions that can wreak absolute havoc on your ability to manage your finances well:
If you assume there will be a bail out for you….
There won’t be. In real life, there are no Wall Street bailouts , nor are there opportunities for the government to sweep in and wave its magic get-out-debt wand.
Sure there are exceptions to every rule and situation, but the truth of the matter is that YOU are responsible for the financial decisions you make in life, and YOU need to be the one cleaning up any messes from mistakes and mishaps. If you think that you can dig yourself into debt, stop paying your bills, disregard your retirement savings and continue along until someone comes along and fixes everything for you, you’re simply setting yourself up for disaster.
If you assume someone will rescue you….
They won’t. With the advent of shows like Mad Men gaining popularity, there have been two main reverberations felt throughout our society: First, the train of thought where the show is nothing more than the entertainment it’s designed to be and second, the train of thought that allows some to believe that the man will take care of everything when it comes to money and finances.
The problem with the latter is that it sets an expectation that women are inferior and shouldn’t be viewed as capable financial managers for their own lives. Of course if you’re married you should be communicating and making joint decisions, but you should definitely not be turning a blind eye to your family’s finances.
If you assume there will always be more time…
There won’t be. Don’t put off your retirement savings plan, don’t put off paying off your debt, and certainly don’t put off the habit of exercising sound financial management. Now is the time to take control of your financial destiny. By doing so, you’re setting yourself up for a lifetime of freedom rather than being a slave to money.
Usually I’m all about the positive message here on The Happy Homeowner, but I hope this dose of financial tough love might be the final, motivating push for you or someone you know who needs to start making changes ASAP.
What other assumptions are detrimental to your overall financial health?
Photo credit: Brett Jordan
Great post! I agree with all of it. I think that sometimes we assume we cannot get ahead when we really could if we made more changes.
That's so true! Far too many people just accept their situation as status quo…imagine what just a bit of hard work/determination can do
Great post! I completely agree.
I have a hard time relating to people who always say they can't get ahead and as soon as they get paid they go buy an xbox video game before paying their rent or electricity bill. Shakes Head.
I don't like giving money to people or charities, I rather give valuable time.
Ugh…those are the worst. The ones who always have the shiny new things/gadgets but "can't" pay their bills. I really have little sympathy!
Assume that you will make more money in the future. In a perfect world that would happen and of course that is the goal but you just don't know what the future holds. Anyways…I have never assumed this and sometimes I'm not sure if that's a good thing or a bad thing since in general I'd like to be that person that has a positive outlook.
My recent post Oh, Monday's
Awesome! Thanks for adding that–it's so true!!! I don't assume either–I create a baseline, but I add any variable income in as "Gravy"
These are definitely the most common. One assumption my age group has made (twenty-somethings) is that things will "return to normal." We have the nostalgia of growing up in the late 90's and early 2000's with all of the amenities an average middle class family could provide. Before the Great Recession we went to university and college, raking up debt in student loans and credit cards, assuming our educations would just open doors with little to no work. Sadly, many of us are still assuming that the world will return to 1999 or 2006. It may but it may not.
My recent post How Do I Open an Online Brokerage Account?
Great post Jen. If there were Wall Street bailouts for individuals that would just be terribly wretched. Another one I would add, though you touched on it, would be assuming that there'll never be an emergency that will require money right away.
Yes! Thanks, John–it's so important to be prepared for accidents and emergencies because they can unfortunately happen at any time…
Good stuff! Here's mine: People often assume that "buy and hold" is the same as "I don't really need to monitor it." That can wreak havoc on your retirement (or other) funds.
My recent post 5 Great Stock Buying Tips To Practice Today
Ooh…good one! Thanks for sharing this–it's important to at least give periodic reviews of ALL financial accounts
Good points. The only assumption you should make is that you're responsible for your own actions. That way when no one comes to rescue you you're not surprised.
My recent post Profit From Your Passion: It’s not always possible.
So true! If people would just take responsibility for their actions, there would be a lot less stress involved with money
I love this post! Personal accountability is a lost art in today's day and age. I think a good one is "If you assume your results will change when your behavior doesn't". That is insanity right there isn't it?
Yes!!! It's amazing how many people just keep repeating the same mistakes and ill-advised behaviors while always expecting a different result…
One thing I learned right away when I got into the workforce was NEVER ASSUME! And that concept can definitely be implemented in regards to personal finance for sure!
My recent post 13 Ways to Save Money in 2013
Great connection–the workplace is also another hotbed for bad assumptions…hmm…maybe another post here
Yep unless you work on Wall Street there is no bailout for you : ) I think assuming that someone will hand you a job after you get your degree is a terrible assumption that could be very detrimental to personal finances.
Awesome addition! That's something too many people thought when I was graduating college. It's also like the assumption that if you can't find a job just go to grad school then you'll be good. Ugh…
I love that and totally agree that you can't ever assume someone will take care of you and rescue you. I think women are especially prone to this way of thinking, but that changes with each passing generation more and more. You are responsible for everything-good or bad! Great article!
My recent post Checking Out Your Ass