Is lack of financial knowledge holding you back?

A few weeks ago I was at my sister’s house and while we were sitting outside visiting, my brother-in-law was repairing their garden hose. I watched him cut off a section of the hose, which was connected to a broken nozzle. He then inserted a new metal hose fitting with threading (I have since learned that piece is called a “male mender”), placed a clamp on it, and screwed on a new nozzle. Voila – they had a working hose. I didn’t think much about it. But later that week, I started thinking about our own garden hose.  

For the past year, our hose nozzle has been broken. It was a nice multi-pattern nozzle that after getting worn down by the sun, it cracked and the pattern piece broke off, causing it to consistently leak but not spray with any actual direction or control. Unfortunately, it was also stuck onto the hose and no matter what we tried, we could not disconnect it. Our plan for the past year was to get a new hose and new nozzle, but we kept putting it off. Not only was that our plan, it was also the only solution we could come up with. We assumed we had to buy a new hose because we couldn’t unscrew the nozzle. 

After remembering what I witnessed my brother-in-law do, I realized we had the same problem and same solution. I promptly went to Lowes and gathered a hose repair kit (they are actually sold as a kit – the male mender and clamp come together) and a new nozzle. Within 10 minutes of getting home, I had a repaired hose. The solution was both cost (under $15) and environmentally effective. 

The point of this was not to tell you how to repair a broken hose (if it is broken the same way ours was, you now know how!) or how to do it economically. The point of this was to demonstrate how sometimes the only solutions we are able to come up with are ones that are familiar to us. When we don’t have information, we cannot use it to arrive at a solution. I simply did not know that I could splice the hose and repair it. 

Personal finance is a basic skill that is not sufficiently taught. Most people must seek out education on their own. Our understanding of personal finance typically comes from what we’ve observed from our parents and society. Throughout my 20 years of schooling, I never was taught how to budget, anything about the real cost of borrowing money, how to purchase a home, how to invest, etc. So, when I was faced with a financial problem, I didn’t have a pre-existing baseline of education. I hadn’t developed any problem-solving skills in this area. Generally, my approach involved borrowing more money (credit is good; student loans are fine; mortgages are normal). Spending in alignment with my values or saving for things I cared about was never something I witnessed others do – buying a latte (or a beer!) on credit was something my peers and I did regularly. 

For many, the baseline of good financial education might be underdeveloped. Sometimes just being able to see someone with slightly more experience than you is enough to sharpen your own skills. Once you know who to look to, your level of education increases with an immediate benefit.

What do you want to know about? It can be as basic as “how do I know what comes out of my paycheck?” or “how do I budget?”, or “am I paying too much for my cell phone bill?”. Email me topics you would love to add to your knowledge so that you can have more for your frame of reference when making financial decisions.