This is a guest post by John Wesley. He blogs about self improvement, motivation, and productivity at PickTheBrain.com (feed).

The transition from student to professional is a psychological challenge. For many people, it’s the first time we experience complete financial independence. Although the basic principles of personal finance are simple, completely changing your mentality isn’t. These are the top three mental blocks you’ll need to overcome to position yourself for a prosperous future.

Mental Block#1: Personal Finance isn’t important
As children, we never learn to manage money. Our parents take care of it and the schools and universities neglect the subject as well. Although children shouldn’t have to worry about money, this lack of education causes problems when we reach adulthood.

When financial independence is thrust upon us, we cope with denial. For 6 months after I started working I let my earnings sit in a checking account; not because I didn’t understand interest or because setting up a savings account is hard, but because I didn’t feel the urgency to do something about it. I got past this mental block when I started to think long-term.

Personal finance is extremely important. The sooner you get started the better. How you manage your money will have an enormous impact on your quality of life over the next 40-60 years. You work hard, why not get the most out of you money and ensure that you’ll be able to afford the lifestyle you want later in life?

Another important mental step is separating your parents income from your own. We get accustomed to the lifestyle our parents provide and think of the family wealth as our own. After becoming financially independent, it’s easy to keep on living as if you’re still under the parental umbrella when you’re actually dirt poor.

Your parents have money — you don’t. A lot of hard work and sacrifice went into building your family’s wealth that you may not have noticed. It’s important to recognize this and adjust your lifestyle accordingly.

Mental Block #2: Personal Finance is too complicated
For people without any financial education the vocabulary is intimidating. When you hear terms like 401k, Roth IRA, mutual fund, etc. — and don’t understand what they mean — it’s easy to get discouraged and think you’ll never be financially competent. In truth, little technical knowledge is required for proficient personal finance. The key is to start with the basics and learn as you go.

Personal finance boils down to two concepts.

  • Frugality – Spending wisely
  • Investment – Using your savings to create positive returns

Sites like Get Rich Slowly, The Simple Dollar, and Wise Bread all provide advice for implementing these concepts. If you make a conscious effort to live frugally, invest your savings, and educate yourself about personal finance, you’ll put yourself in a great position for the future.

Mental Block #3: Personal Finance is too difficult
Another mental block that stops people from embracing personal finance is the belief that it’s too difficult. Either it takes too much time, too much knowledge, or too much initial capital to get started.

This simply isn’t true. If you utilize direct deposit you can automatically spread your earnings over checking, savings, investment, and retirement accounts however you choose. After a small investment of time to get everything set up, you won’t have to put any effort into managing your money.

Although you’ll probably want to make adjustments from time to time to optimize your investments, automation allows you to dedicate as little of your time as you’d like to personal finance.

There is a lot of hype and complicated language associated with personal finance, but the essential aspects are simple. Anyone can learn to manage their money more effectively. If you haven’t already, get started today. How can you afford not to?

For more about money at Pick the Brain, check out 7 Tips for Avoiding a Lifetime of Debt.

This article is about Basics, Psychology