7 Simple Ways To Get Financial Education
Handling one’s finances can be quite overwhelming. Evidence shows that most adults fail to understand basic Financial Concepts and as a result are directly forced to live below an average normal life. Given the fact that money is central to just about everything that we do in life, how is it that very few people have more than a superficial understanding about it? The answer is because they have never had a personal finance education. People spend an average of 12 years at school, and I reckon it is totallyunacceptable that they will still have no clue as to how to deal with money.
WHAT IS FINANCIAL EDUCATION?
Financial Education is about learning how to use money in the best way possible to live the life you want –learn how money works, how to use money, how to make money work for you.As defined by the OECD, “it is the process by which financial consumers/investors improve their understanding of financial products and concepts and, through information, instruction and/or objective advice, develop the skills and confidence to become aware of (financial) risks and opportunities, to make informed choices, to know where to go for help, and to take other effective actions to improve their financial well-being and protection.”Understanding financial basics thus allow you and others to make smarter money choices and become self-sufficient in financial decision making. The good news is that it is never too late (neither too early) to start learning about your finances.
WHO NEEDS FINANCIAL EDUATION?
The simple answer here is everyone! From children to current students in school, and most definitely adults. Many components of financial education can be taught to young children, with the topics slowly getting more advanced as they get older.
These financial concepts are not hard to learn and when broken down over time, anyone can become a master of their finances.
WHY WE NEED FINANCIAL EDUCATION?
Households and individuals are not able to make sound financial decisions creating a burden on the economy. The weak understanding has led to preventable financial losseswhich causedseveral harms to people. Here are more specificreasons to get financial education.
- Gain Control
Financial Education helps you hold the wheels to your personal finances letting you for once control your money and invariably your life. Your attitude towards finances change. The way you look and think about money alters for the better. This empowers you and makes you feel more confident and decisive with your money. You are able to better manage your personal and household resources, both on a day-to-day basis and over a long-term horizon. Once you learn how to manage your finances well, you will understand what you can realistically afford and what you might need to trim from your expenses.
You hear how people moved from recurring debt to zero debt; they stopped spending unnecessarily by keeping to their budget. It can offer you a way out when debt feels overwhelming because you start to really understand how debt works. Even for a poor or an average individual/family with an uncertain income source, you are able to plan and save to deal with unexpected personal or family expenses without falling into over-indebtedness.
- Understand Your Choices
Humans are faced with countless personal finance decisions every day. They range from the apparently minor (should I eat out for lunch today) to the more impactful (which school should my children attend). Understanding money and how finances work can help you understand the reason behind some choices you might need to make. It is easier to make the bad choice because it takes less effort. Most ‘sellers’ of financial product (including Financial Planners) want to exploit our emotion and impulse to think quickly. They would only be able to get you as a victimif you don’t have the appropriate knowledge about their offerings.
Financial Education provokes the power of choice- we are able to think slower, deliberate and logical when making any financial decision. You will know what each investment options entail and offer; you know what plan to prioritize; you even know what expenses to cut out. For example, if you plan on buying a home in the future, it can help you understand why you don’t want to open a credit card right now, or how doing so could get in the way of getting the best mortgage offer.
- Financial Education Helps You Plan for the Future
As you gain financial knowledge, you will be more inclined to set financial goals for yourself. Goals that will be targeted at your financial future. You will be looking at goals likestop living paycheck to paycheck, get out of debt, live on less than you make etc. With your retirement plan, financial education can help you understand how much money you will need. It can help you understand how to save which is based on your current income, inflation, and how long you anticipate living in retirement.
Understanding your finances can also help you plan for yourother goals. If you want to build an Apartment, it can help you figure out how much you need to save for the buildingproject and how much you should set aside each month so that you have the needed funds.
- Boost Economy
Improved financial literacy can potentially strengthen the efficiency of financial markets. Consumers who are better informed about financial risks and opportunities, and who are more aware of their own rights and responsibilities in relation to financial institutions can contribute to developing better functioning financial markets. By fostering long-term saving, financial education can promote the development of formal financial markets and infrastructure, ensuring that the financial sector makes an effective contribution to real economic growth.
HERE ARE 7 SIMPLE WAYS TO GET FINANCIAL EDUCATION
Aboutvery few schools offer courses in managing your money, this means that most of us will need to get our personal finance education from our parents (if we are lucky) or pick it up ourselves. Good news, you don’t have to spend much money to find out how to better manage your finances. One way I get my own financial knowledge is to be inquisitive about every money related matter that I come across. That money matter could be what I read, heard or watched about finances.By taking a few minutes a day to educate yourself and form smart, simple money habits, you may be well on your way to greater financial literacy.
–Read books on money and business. In order to get started, books will become key in your quest to be financially literate. Dedicate a minimum of 1-2 hours each week to reading books about money management, business, investing, finances, etc. You canregister with a library to read business books and journals.
Some bestsellers which were important to my financial education are: ‘I Will Teach You to Be Rich,’‘The Millionaire Next Door,’ ‘Rich Dad Poor Dad.’ ‘Personal Finance for Dummies,’ ‘The Total Money Makeover,’ ‘The Cash flow Quadrant,’ ‘The Little Book of Common-Sense Investing,’ and ‘Think and Grow Rich’.Read my new book “The Money Handout,” as a good first step to being financially secured. There are audiobooks and eBooks online as well.
-Podcasting is an Option. Podcasting is a free service that allows Internet users to pull audio files to listen to on computers. One reason podcasts are so popular is that the format is uniquely situation to fit into our busy lives. For any topic you are interested in, you will find a podcast dedicated to it. You’ll find a podcast that fits. They are delivered digitally and allows you to listen while you commit to other activities(if it doesn’t disrupt your productivity). You can listen on your way to or from work, while doing home errands, or even at work.
-Go on Business and Finance sites.There are a lot of different financial blogs, covering a whole wide world of different opinions and approaches to money. Fire up the website, register an account if you don’t have one, and build yourself a totally borrowed, totally-free money learning stack of online resources.Think of blog sites like Kiplinger,Financial Times, Get Rich Slowly, Mint, The Penny Hoarder and many others including financetreat.com. As great learning centers, they boast of useful information and tools that can assist level-up your financial literacy.
-Watch money videos on YouTube.A lot of people prefer information delivered in video form. Luckily, you can get all the business and money videos you can handle online on YouTube,an online video-sharing platform. It has channels covering everything from money fundamentals to saving and more.A lot of personal finance bloggershave the best of videos on the money topic.
Finance Treat YouTube channel is being set up.
-Read Newspapers and Magazines:If reading newspapers are already part of your daily routine, start to read the personal finance section of them. They can equally be important to your financial education.Some sections are geared toward money mattersand are great resources.They can convey, as efficiently as possible, current information, or “news”, to a particular audience on particular topics including business and finance. They are digitized and can be assessed from a wide range of locations on a daily basis.
-Take a Financial Literacy Course:Besides prints and online publications, you can get involved in a financial literacy class or course. This is if you feel you want to go a step further or need the structure to learn. Many are paid, but there are some free courses online that can be a great educator. Get on the internet and start from personal finance sites.Partake at personal finance summits where there are presentations from speakers about those important business and finance topics.
-Talk about Money:Another simple but great way to increase your financial knowledge is to talk more about money with friends, family and even strangers. Don’t avoid the topic.Ditch the money ‘taboo’ and learn in an relaxed environment. Make it a positive conversation. Don’t just talk numbers, talk values.Talk about earning money, not just spending it. Brush yourself up on some math.
-Use Finance Management Tools: A great way to gain financial literacy, they are tools that make handling of the day-to-day financial tasks much easier with hands-on guides. They are available online as programs templates and/or as apps and automated to follow through a process. A continuous use will put you on a learning curve that builds the needed financial knowledge. Financial management tools like Mint, Google Sheets etcare great aids to improving financial literacy. They will manage your personal finances while creating a great learning experience for you.
-Ask For Expert Advice:Talking to an experienced advisor can help people get financial education with the advisor taking you through how to handleyour finances. For example, while they advise on yourdebts and make suggestions on how to pay them off, you will learn and even develop your strategies that will continue to deal debts into the future.
-Keep on Digging Deep till all your questions with respect to that particular money topic are answered. You can continue learning how to manage your money more effectively by budgeting and paying off debt (Financial experts and advisors may assist).
Although some will still not make a change until they are too deep in financial crisis, I hope that you won’t be one of those who will still ask, “Whyis personal finance important?”Feel free to start with any of the methods and get the right information.
