Monday, July 15, 2024

Financial Skills You Need to Acquire and Practice

People ask me all the time why they cannot get the opportunity to save money. Is it because of inflation? Is it the low wages? Or is it a poor and unhealthy lifestyle? I tell them, “Well, it’s a financially misinformed lifestyle that’s the issue”.

People need to live their life fully. Everybody deserves that. But somehow, money keeps on poking its nose. That’s irritating. But it is also true that you cannot just push that poking nose out. You need money to live or to survive (if you look at life that way). To not get in a fight with it, you will need to learn a little about money management. It starts here.

Why Are We Short of Financial Skills?

The answer to that is going to be controversial. Many people are skilled with money. They, in fact, know more than most other people. Even businesses take the help of these wonderful personalities.

But that should not be the case always, now is it? At some point, we want to deem ourselves as independent beings. If you do, then incorporating some kinds of money habits all by yourself is going to work great for you.

We are not always short of financial skills. Nowadays, you already know that most of us are conscious of finance. But the problem is learning what finance is and being skilled in it are different. Knowing and skills have no limits to them. But if you want to make a difference financially, being skilled comes in better use than being knowledgeable.

Here Are a Few Financial Skills You Need to Learn

At least, at this age, your financial skills will matter. And yes, it really does not matter to go to finance school and get yourself a degree from there. You just need to be smart. Make money your friend in these ways:

1. Be Self-Aware

I ask my clients this question at the right time of a conversation. When they furnish things about their finances in front of me, I understand they are unaware of where they want their money to go. This is where a view of your life goals can help you out.

Your life determines the money you want to spend. Yes, you might find this idea a little controversial. However, this is the truth. No one is going to tell you that often. We mostly think our finances determine the style of our living. Well, the bitter truth is that we compromise. We don’t really want to make our lives much more difficult here. All we can do is we can take control over what investments we want to make, and we’ll be fine.

To determine what investments we can make, we have to find out what we want in our lives. Find out your plans, your retirement policies, and what plans you have in life. It might give you clarity over investing the money.

2. Settle for the Less by Reducing Impulsive Behaviours

You have to find the means of it. Every; single one of us has impulses to buy things in an instant. We can make it more and more understandable to ourselves if we take the time to think about it. We do not have to go to a therapist to control our impulse spending habits. However, we do need help on our own to find out where we buy things just because we ‘feel’ to, but we don’t ‘need’ them.

No. I am not asking my clients to become knowledgeable about human psychology. I am not even asking you to stop your spending habits. Nevertheless, identify them. Maybe you don’t need that new pair of shoes or a new Smartphone right now. Take some time and think if the thing has real-life value in the future (for the long-term sense). If it does, then you should buy it.

3. Learn about Finances Practically

You have a lot of financial options and services available to you at this moment. You may not know all of them. However, it is time, my dear reader, to learn about them and become a little more knowledgeable. Here are the options:

  • Ask your parents, your family members, friends, or someone expert about money management. You will be surprised to know a lot of tactics they have used to manage their earning and expenditure effectively.
  • If possible, speak with a finance professional. Look them up online and talk to them honestly about your financial motives and management. Tell the professional how you can grow your knowledge in the financial sense.
  • Read books. You can hit the bookstore of your neighbourhood or maybe search online for financial bestsellers. I must say many finance books are as surprising as the famous self-help books.
  • Learn about investment opportunities. Find where you might want to invest and operate. You can read and research on investment too. Again, getting in touch with investors might help a lot.
  • Find out about financial services. Learn about credit cards. Speak to lenders about secured and unsecured  The unemployed can also take out loans and manage money in need. This kind of information might seem a little odd, but the industry has cultivated such types of services for you. Learn about them and take their help if you need it.
  • The video-sharing platforms and the forums are places where you can find the best results. You can get in touch with people who are thinking and discussing finances. Who knows? A session there might be eye-opening for you.

Using these small steps, you are simply refining your ideas on money. Find effective means to work through the details and learn more about money. It will help you in the long run for sure.

4. Learn about Alternative Income Streams

Isn’t it right to increase your income? However, the thing is, you don’t always have to be passionate about it. Sometimes, earning extra can also be meant for a cause. Let me give you an example of it.

My friend Stanley took out one of the monthly instalment loans with no credit check in the UK from a direct lender. He is such a smart chap that he started earning part-time with a company to get a monthly salary. He used that salary to pay the said instalments. Don’t you think it is a worthy idea?

  • Go through the skill development programs and learn a new skill (except the money skills) to open up different routes of income. It may serve you as a contingency plan too.
  • Added to that, you may look up websites where you may find part-time or contractual jobs.
  • In the UK, non-profit organisations can help you with contractual work as well. At the end of the work, you are going to be paid a wage.
  • People often leave their day jobs to start a business. Of course, you are welcome to do that if you want it.
  • Learn more about passive income if you can manage your earnings by your assets and other things. It is going to give you a good return, right?

To Conclude

Yes, I am not going to give you traditional advice on how to budget and all. You have already known it. Now, you need to understand your finances well. It will enable you to take financial decisions yourselves.

Simran Chauhan
Simran Chauhan
Simran is currently perusing her Masters in Computer science. She has been working with us from past 2 years.

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