Countless studies show that Americans are not financially literate. For the most part. It’s easy to harp on this topic, ranting doom and gloom despair. But it’s time to look the reality of this situation in the face and make a change. Financial illiteracy makes individuals much more vulnerable to exploitation and poverty, weighs down the world economy, and leads to misery and discontent. This isn’t about all about money. It’s about people, possibilities, and the future.
The problem is, most people aren’t going to learn this stuff from their parents. They also won’t take a class on finance in the average public school, with a calcified common core standard choking out practical lifestyle learning. Nope, people who want to get smart about money have to do it themselves. And most of them can’t afford a 5 to 6 figure finance education. They’ve got to do it themselves. Becoming a finance auto-didact is easier said than done, but it’s not as hard as all that. There are some basic ways to learn the ropes and turn your life around. Here’s how.
- Get Up. If you’re like me when I started learning about money, you’re in debt, wasting a ton of your income, and not at all prepared for the future. This doesn’t make you stupid or lazy. It’s just where most of us start. Look around you. Take stock of where you are, and where this is leading. Decide that you want to change, let that goal wriggle it’s way from your head into your subconscious mind where it’ll drive you intention, your choices. Budget your income and pay your debts off with everything you can spare till they’re gone. This may take years, but you can do it.
- Get Going. Now that you’ve killed your debt, it’s time to learn and do. You’ve got a lot to learn about finance. Ask yourself basic questions that evade your understanding, and find the answers using Google. “What is a mortgage, exactly?” “How do mutual funds work?” Those are two things I have personally typed into my browser within the past five years. We’ve all got to start somewhere. Don’t be ashamed about things you don’t know. Once you know the answers, act upon them. Now that you know a little bit, you understand that an emergency fund is vital to financial security, so you save one up. Now that you understand how an IRA works, you make sure to max out your yearly contributions. Now that you understand the wealth-building power of owning your own home, you start saving every month for a downpayment. When you learn to trade CFDs, you become more diversified in your investments.
- Keep Going. The thing about financial literacy, is that it’s just like learning any other language: it’s hardest right at the start. Just think about your high school Spanish classes, how hard it was to learn those first words, to roll your R’s, to memorize a new approach to grammar. After a few months, you had the basics down. But you aren’t in finance class. No one is grading you, pushing you forward. This is all on your own back. Don’t stop! Once you’ve mastered the basics, it all gets MUCH EASIER. When you’ve finished these first two steps, you’ll be well on your way to a life of options and security. It’s not all about wealth, it’s about taking good care of yourself and the ones you love.
I hope this is a pep talk that hits home. I think that learning the basics of personal finance is one of the best decisions I’ve ever made, and I know it’ll be the same for you. Remember, no one is ever sorry they learned something. Knowledge pays off in ways that are hard to anticipate, but that become more valuable as time goes on. Learn and do today, in personal finance, and it will transform your life for the better.