How to be financially savvy

by Kristina on April 9, 2015 · 6 comments

financially savvy, smart about money, financially smartGood morning Dinks.  Usually I hate that phrase – financially savvy, it sounds so snobby – but in this case it’s a perfect fit for what we’re going to discuss today.  Let me ask you a question, are you good with money?

I had lunch with my high school friend Jessica yesterday; she told me that she’s just about to move in with her boyfriend of over two years.  Jessica and her boyfriend seem to be perfect together, except when it comes to money.  “He told me to manage the money because I’ve always been good with money and he’s not.”

How did you learn about money?

Jessica’s statement made me start thinking, why has she always been good with money and I didn’t learn until my 30s?  We grew up in the same city and went to the same high school, overall we had very similar lives – except when it comes to money.

If you were (or are) less than perfect with money what are you doing about it.  I think there’s a number of ways we can learn how to be smart with money.  Which way did you (or are you) learning to be financially savvy?

Learn from your mistakes.  The good old “I’ll never do that again” philosophy.  This is exactly how I learned to manage money.  I made a ton of debt mistakes in my late teens and 20s.  I paid for them – literally – in my 30s but now I’m proud to say that’s a lesson you only need to learn once.

Stumble upon the way.  Sometimes you can learn along the way without causing too much devastation to your financial situation.  Unfortunately I am a go big or go home type of person so I made a bunch of colossal mistakes, most notably I bought a $35,000 car, but it doesn’t have to be like that for everyone.  Sometimes we can make a bad decision, it sets us back a bit and we do it better the next time.  That’s how mistakes should be right?

Talk to your friends.  Before the invention of the internet and before Google took over this was the way people interacted.  When you had a question you could ask someone and expect an honest answer instead of today’s annoyed response of “Just Google it”.   I hate that phrase.  I love the internet for many things, but it’s definitely taken away a lot of human interaction.  Sometimes the best way to learn something is to just talk about it with your friends and family.

Get hands on training.  Sometimes you can only learn in a classroom.  I always advise students to take at least one finance course in college and even before if possible.  It’s important to learn about managing money before starting life on our own.  Money mistakes are easier to recover from if you’re living at home and have fewer financial obligations.  Attending money expert seminars are also a good way to go.

{ 4 comments… read them below or add one }

1 Clarisse @ Make Money Your Way April 9, 2015 at 6:20 am

Honestly, I can say that I’m not really good when it comes to financial matter before, but I had learned the hard way. I faced some consequences because of that, how I wish my parents educated me more on how to handle the money the right way.

2 No Nonsense Landlord April 9, 2015 at 9:10 am

The same is true with landlording, a bad tenant teaches more than a great one. I have written a few stories about the bad ones too, as the good tenants are a boring story…

It’s really easy though. Pay you fixed expenses. Then save 10%+, then spend the rest on something more fun (or save even more, so you can have even more fun later)

3 The Professor April 9, 2015 at 6:37 pm

I learned a lot in school, but I think I learned even more by just investing and saving on my own. Nothing beats experience.

4 Kristina April 12, 2015 at 6:55 pm

@Clarisse – Me too. We learned how to manage money the hard way – but that’s a lesson you only learn once. There were no blogs back then so we had to learn on our own.

@No Nonsense Landlord – I bet you have some great stories. It’s too bad tenants suck, but at least now you know what red flags to look out for.

@The Professor – That is so true, with money and with everything in life. Experience is what it’s all about.

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