5 Ways to Get Better With Money
You know you should be saving money: for emergencies, for retirement, etc. You know you should keep better track of your spending, making a regular budget and sticking to it over time. You know there are a lot of things you should be doing when it comes to your finances. But the fact of the matter is, you’re really bad with money.
There’s no shame in it. A lot of people have trouble with money, or with numbers in general. But that lack of savvy can seriously hurt you in the long run. Fortunately, there are some things you can do to improve your finance skills, even if you’re generally poor with money. Here are five of them.
- Get Over Your Mental Blocks. It’s a vicious circle. The fact that you know you’re bad with money subconsciously contributes to the fact that you’re bad with money. Anytime anything finance-related comes up, you know you can’t understand it, so you get overwhelmed and anxious about it, leading to more bad decisions—or simply taking no action at all, when an action is required. But here’s the thing: a lot of money issues are simpler than you think. If you make an effort to go in with a positive attitude, and look at the problem logically instead of running away from it, you’ll often find that there’s a simple choice that will help you save money. Once you’ve made that choice, and proven that you can do it, then it will be easier to address the next problem, and so on.
- Learn the Terminology. One of the most daunting aspects of finance is all the technical terms that people use. Do you have an IRA or a 401(k)? Is your advisor a fiduciary? Or do you just put your money into index funds? Make it a point to learn what these terms mean and how they apply to you, and you’ll be able to follow along more easily with financial conversations going forward, and not get overwhelmed. A good tool for learning these terms is Investopedia. They provide simple explanations for complex terms, in basic, jargon-free English, along with examples to demonstrate what’s going on and links to related terms and concepts.
- Get a Mentor. Of course, some money issues are complicated. But who says you have to deal with them alone? Talk to someone who’s good with numbers and with money, and ask if they’ll help you, showing you the ins and outs of finance and helping you save money. Not only can they help you with big, seemingly incomprehensible decisions, they can hopefully explain it to you in a way that you’ll understand, so that next time you’ll be able to do it on your own.
- Take a Class. Your local community college or community center may offer classes in basic finance skills, such as creating and balancing a budget, investing for your retirement, etc. Do some research and see if there’s a course you can enroll in.
- Make a Budget. Once you’ve learned the basics, it’s time to apply them to your life. Look at your household’s income. Total up everything you get in an average month, including the paychecks of you and your spouse, and any other money that may be coming in from other sources. Then spend a month looking at your expenses. How much do you generally spend on groceries? How much is rent, or mortgage payments? What about utilities, transportation, and other expenses? Then look at less necessary expenses, such as entertainment. Once you have the total, see if there’s anything that can be cut out, or reduced. It can be a long process, but it’s simpler than you think, and it will help you save money in the long run.
There’s no reason to be afraid of money matters. Even if you don’t have innate finance skills, you can build them up over time. You might not be a financial genius, but with a little time and effort, you can become skilled enough to manage your basic finances efficiently and prepare for the future.