Not too long ago there was a moment in my life that I realized I didn’t know a single thing about finances. Nothing! Zilch! Nada! I was so ambiguous to this topic, it was sad.
I worked, received my paycheck, and spent it. MAYBE, put some money into savings… if I didn’t spend it during the month. That is all I understood about money.
Then something clicked in my mind. I had a big wake-up call. I don’t recall what it was that triggered the importance of this subject, but I am extremely thankful for that moment. I am hoping that when you read posts on my blog or even other sites, you may see the importance of understanding finances.
So with that said, here are 5 steps that I think are beneficial for attaining a savvy mindset about finances.
Now, this might seem strange to say but accepting that you don’t know much about this topic is a great place to start. Having this realization will only be beneficial to obtaining a savvy mindset. Finances are not a hard topic to understand. It certainly looks intimidating with charts, numbers, and words that make no sense. But so does the word STERNOCLEIDOMASTOID, but I’m pretty sure you know exactly what this is and what it does.
Also, accept the fact that finances are a must learn subject. Once you do that, the ability to learn will be somewhat easier to do.
2.) Read Books
One of the best things that I have done once I accepted that I hadn’t the slightest clue about money, was pick up a book about finances and read it. The particular book that I started with is called “The Total Money Makeover…” by Dave Ramsey. I actually received this book as a wedding gift. I didn’t read it then ( I sure wish I would have). I started reading it about a year and a half after I was married. I read this book with absolutely no financial knowledge. Reading this book really opened up my eyes. It taught me what I should be doing with my money.
I like Dave Ramsey, however, there are a few things I disagree with after becoming further educated. Which I’ll talk about in another post…sometime. Oh heads up, if you choose to read this book, he is Christian and is not afraid to show it. Sometimes I felt like he was preaching to me. If you can get past that though, the content he provides is of great worth.
Now, his book is good but I wouldn’t say it is the best. There are a ton of other good books about finances. I’m making a list of books that I have read and have helped me oh so much. It would be wise to read some of these books. Click Here to see the list.
3.) Ask Questions
When reading these books I can almost guarantee there will be terms you have never seen or heard of before. Don’t call it quits when you see these foreign words! Don’t give up and say “I don’t know what this means” and place the book aside. Rather say “I don’t know what this means, I should google this.” Google is great. There is an unlimited amount of resources at the tips of our fingers and we choose to look up funny cat videos. Use it to become better educated.
I had tons of questions when I started educating myself on finances.
Such as what is 401k? What is an IRA? There are different kinds of IRA’s?? There are other savings accounts other than the one the bank offers? Whats APY and APR? What is a Bull market what is a Bear market?I had no idea about any of these! I was soooo clueless about everything.
This is ok! Feel free to ask questions to anyone and everyone. It will only be beneficial to you.
“He who asks a question remains a fool for five minutes. He who does not ask remains a fool forever.”
So be a fool for a few minutes. Don’t be a fool forever. Gain intelligence by asking questions.
Rome wasn’t built in a day, nor will your knowledge about finances happen overnight. It will take time. You won’t read one book and be omniscient about the market. Granted if this happens to you, may I encourage you to be a day trader or start your own hedge fund. For those that don’t have this ability and have to ask questions…. its gonna take time to learn.
I had a gap year from the time I graduated to my first day of dental school. During this period I used my time to read articles, blogs, and books about the financial world. It was a great time to study this subject. If you have time like I had, read some books. Become educated. If you are currently in school, listen to some podcasts or listen to a book on audible, or just glance through a post a day/week/month whenever. Anything really will be better than nothing.
Arguably this could fit in with number four. Yet, it deserves a category of its own. Diligence is extremely important for attaining a financial savvy mindset. There will be moments you will want to throw in the towel and just hire someone to do all of this for you. That, however, can be a costly mistake.
The financial world is a confusing one and it is complex on purpose. This way there are “experts” that are willing to help you with your financial decisions. For a fee of course. Turns out though, you can be just as wise if not wiser than most of the financial advisers out there.
The trick to becoming wiser than some financial advisers?
By being diligent you will gain knowledge of the financial world. You will begin to understand risk and what should be in your portfolio. You will be able to understand what influences the market. You will understand how to manage your money and how money works.
It is a simple topic that has been altered to look confusing. This way the average person will quit before they can get a good understanding. This is a reason why the rich keep getting richer. It’s because they have put in diligence to understand how finances work.
In just a few months (seriously just a few months) you can obtain the knowledge you need to handle your own finances. Don’t give up. See the importance of learning finances. You can do it and be in charge of your own money.
So What do you think? Do you think these steps will help with your determination to learn? Are there other steps you can think of that can help you achieve a financial savvy mindset? Tell me what you think and leave a comment!