Do you need to learn how to money? Don't feel bad if you do. Worldwide, only 1-in-3 adults are financially literate. Not only is financial illiteracy widespread, but there are significant variations among countries and groups.
For example, women, the poor, and lower educated respondents are more likely to suffer from gaps in financial knowledge, the S&P Global FinLit Survey found.
Here in the United States, we dedicate the entire month of April to financial literacy. But you don't need a month-long event to get started if you need help.
Let's review how you can begin to increase your how to money knowledge, today and change your financial future forever.
Increase Your “How to Money” Knowledge
It can seem daunting to learn a subject you've never had formal education or training on. But consider we all begin to use money at an early age, and use it for our entire lives, it's a critical life skill we need to know.
The good news is there are many ways to learn how to money. There are books, podcasts, blogs, and videos. Many of these resources are free to access or and can be found at your public library or online.
Pick up and listen or read any one of these resources today, to begin to increase your how to money knowledge. The great news is these are just a few of the thousands of personal finance resources that are available.
There are many books, blogs, and podcasts that will focus on the particular niche of personal finance you are looking for. Whether you want to learn how to money to get out debt, invest, frugality, passive income, student loans, earn extra cash, side hustles, credit cards, travel hacking, make money online, financial independence, etc. There's a resource for you.
Have a Money Conversation
How to Money is often considered a taboo topic. We'd simply rather talk about sex, then have a money conversation. The fact that two-thirds of the population doesn't know much about money leads to many of us to experience shame, anxiety, or embarrassment when the topic rolls around.
The only way we can break this taboo is to have these tough conversations. A husband and wife are a much better team working on common goals, then both off doing their own thing. The fact that money-related issues are frequently cited as a reason for divorce doesn't bode well if you aren't talking money.
Most, if not all, parents want to provide better for their children. Teaching them how to money, a skill they will use for life should be a top priority. But what if you don't know much about money? Increase your knowledge first, lead by example second, and pass it on to the kids before they begin their financial lives.
Essential “How to Money” Topics
Let's review some of the essential money topics you need to understand to be successful with your money.
- Income / Expenses – How much money do you have coming in, and how much do you have going out. This is were many of us make our first money mistake. We have no idea about our income and expenses. In most cases, we are spending more then we earn, causing a ripple effect in our lives, like stress, fights, and fear. Collect all of this information, and get in down on paper a google sheet or app. Starting with reviewing your bank accounts, and reviewing all purchases for 2-3 months will give you a good overview of where your money is going. You might find some items to cut and save money.
- Budget – The dreaded “b” word. Many of us feel if we use a budget, it will restrict how we use our money. It can actually give you a plan to spend money intentionally on priorities in your life if you don't like the word “budget” use “money blueprint” instead. Any way you slice it, you need to have a roadmap for how you will spend your money.
- Emergency Fund – This is the cash cushion you'll rely on when life punches you in the face. Life has a way of piling on. Ever have your car blow up, or appliance stop working, or even worst lose a job? An emergency fund softens any one or many of these events because you're not worried about how you pay for it. Keep this money in high yield savings account with no debit cards tied to it. Stashing your cash this way is recommended. This way to you have quick access to it but won't be tempted to use it for impulse shopping.
- Debt – Debt steals your ability to build wealth. Yes, there are good debts and bad debts, but if you are carrying credit card debt and paying for sneakers, you bought in 2001. You need a better plan. Once you have your money blueprint laid out, getting out of debt should be a top priority.
- Credit Score – That score that runs between 300-850 can cost your thousands in interest charges over the years. The higher your credit score, the better access you'll have to low interest rates when borrowing money for a mortgage. A credit score can impact your ability to get a smartphone, rent an apartment, or how much you'll pay for insurance premiums. Do yourself a favor, get a copy of your credit report, and learn how to improve your score.
- Investing – You'll never grow your net worth unless you can learn how to invest. Start with the basics, like learning how compound interest works. You don't need to research 100 companies and buy their stocks to have a reliable wealth growing investment strategy. It's important to get started as early as possible and learn as you go. We all need to save for retirement. Be sure to review all the options and benefits your employer offers. Don't overlook the free money many offers via a company match in retirement plans.
These six categories are essential how to money topics. Yes, there is more to money management, but more can be learned over time. Keep in mind, slow and steady wins the race.
Pay it Forward
Once you have a better understanding of how to money, pay it forward. You might work with your spouse on your shared financial goals, begin teaching your children about money, or help a family or friend get started on a path to growing their wealth.
Share the resources you read or listened too. Don't be afraid to have the money conversation. I'm sure the other person is in a similar boat as you when it comes to money, and just too scared to admit it.
Talking and supporting one another is the basis for anyone of the 12-step programs that out there. These 12-steps programs have a long history of helping others but helping ourselves.
Final Thoughts on How to Money
There's no get rich or get out of debt quick secrets. It takes hard work to manage your money. There's never a better time to start increasing your how to money knowledge than right now. Make it a goal to read or listen to one piece of personal finance information daily—your future money self with thank you.
Brian is a dad, husband, and an IT professional by trade. A Personal Finance Blogger since 2013 who, with his family, has successfully paid off over $100K worth of consumer debt. Now that Brian is debt-free, his mission is to help his three children prepare for their financial lives and educate others to achieved financial success. He blogs at Debt Discipline.