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Five Skills to Save You $$$: Financial Skills

The second skill in our series of skills to help you save money is perhaps the most obvious, but also the most important of the five skills: financial skills. While learning about finances may be boring to some people, it is time well spent. Here are the skills you need to acquire to save money and make yourself a financial genius.

Demystify finances/economics. Perhaps the greatest hurdle to being a financial ninja is fear. Let’s face it, for many people, finances are scary. They can be obscure, technical, and full of terminology which might as well be a foreign language. Most people bury their heads in the sand and ignore their finances because of this fear. One of the first things you can do to gain the financial skills necessary to save money is to get past this financial threshold. I have found that one of the best ways to stop this fear of all things money is to immerse yourself in the world of finance. Take a look at the Wall Street Journal. Read books on various financial topics. And there is always my favorite, financial podcasts. I listen to Planet Money, produced by NPR, at least once a week. They discuss deep economic and financial issues but they make it accessible to us lay people. By putting your toe into the world of finance, it becomes a lot less scary and lets you have the confidence to make better financial decisions.

Learn to budget. Perhaps the greatest financial skill you can acquire is to learn to budget. You not only need to learn to budget, but you need to learn to live by a budget. It can be too easy these days to simply spend away in blissful ignorance of where the money is going. By keeping track and watching how you spend money, you can put that money to better use. Nobody got rich living beyond his means. A budget will keep you on track to financial success. Learn how to track your finances and predict how much you’ll spend monthly. There are plenty of websites and software that make budgeting much easier. Use these to make the budget habit stick in your own life. By learning this skill, you will save money simply because you will be more aware of your finances.

Learn about credit. There are two sides to credit: one which will help you and one which will hurt you. If you learn what credit is, how it works, and how to properly use it, it can help you save money when buying a house, buying a car, or buying anything else on credit. Learn how the system works. Learn about the three credit reporting agencies. Learn what your credit score is and what it means. The more you can figure out the enigma that credit is, the sooner you can have it working for you rather than against you.

Figure out investing. Investing is what grownups do with their money. As you become more solidified financially, you will find that investing is how you will prepare for your financial future. Learn about the stock market and how it works. Learn about mutual funds, annuities, and other financial tools created to help your money grow. The more you can learn about how to make your money work for you, the faster it can grow.

Learn to plan for retirement. For many people, retirement seems a LONG way off. Unfortunately, it can sneak up on you before you know it. If you can gain the financial skills necessary to plan for retirement now, you can save money and secure your financial future. Much of this preparation will overlap with learning about investing (because like I said, investing is what grownups do with their money) and will serve your overall financial health. Planning for retirement now will give you financial freedom and peace of mind for the future.

Ok readers, what advice do you have for learning all things finance?

Article publié pour la première fois le 02/04/2013

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