The Challenge of Personal Finance

A Reflection on Healthy Choices

By Cancelo Alvarez

This past weekend, I once again examined my personal finances. After five years of reading and self-development, I’ve finally grasped the root challenge people face with money management. It’s the same challenge people face in looking after their mental and physical well-being.

As Scott Peck writes in The Road Less Traveled, we all have a healthy self and a sick self. And because life is designed with an inevitable end, many have adopted the sick self, almost as a way of damning existence. They’ve given up on living with purpose, values, or a positive outlook amidst the certainty of death.

However, unlike mental or physical well-being, neglecting your financial well-being hits you immediately. Let me explain. Skipping exercise this week won’t make you unfit, skipping a book won’t lead to a lack of inspiration, and skipping deep breathing won’t lead to disaster. But skipping your savings this week will leave you unprepared for an emergency months later. Buying fast food today ensures you’ll have fewer resources in the kitchen in a couple of days.

In other words, financial decisions are among the most critical choices you’ll make. They determine whether you live in poverty or tranquility.

Four Essentials for Managing Personal Finance

As you reflect on these, think about how far you’ve come with each—and feel free to share any strategies you’ve found helpful.

1. Investments: Are you building investments that will one day replace your salary?
   Think of real estate, shares in stocks, or even side hustles that gradually grow over time.
2. Income: Do you have a reliable income from valuable skills you’ve developed?
3. Savings: Are you saving aggressively? Are you saving at all?
4. Expenses: Do you track your spending? Do you know how much you’re spending on recurring expenses each month?

Many struggle financially because they neglect one or two of these essentials, usually savings and investments, and then wonder why they never have enough to live the life they want.

Investments are hard because they require sacrificing instant gratification. Instead of buying a new car or wardrobe, you put that money into something that grows over time. Savings are equally difficult because life’s unexpected turns can always shake your discipline. Yet, in the long run, those who save and invest consistently find themselves more successful and secure.

Ultimately, it’s not just about surviving—it’s about thriving financially, by making every decision today a step toward your future freedom. So, which of these essentials are you mastering, and which ones still need work?