When I started my financial planning career seven years ago, I quickly learned that the people who were financially successful were the ones who dedicated the time and energy to regularly budgeting, managing, and planning out their finances.
In other words, they had the discipline get a financial education, and continue to expand that education over their lifetime. A financial education is something almost no one receives growing up, and yet it’s one of the primary components of financial success.
If you’re new to personal finance or simply looking for ways to expand your financial knowledge, here are five easy steps to getting the financial education you need. (Originally provided by Brittney Castro)
1. Schedule Weekly Money Dates.
Studies show that millionaires spend, on average, 8.4 hours a month managing and planning out their finances.* While many people state they want to be millionaires, most also don’t devote the time and energy necessary to making it happen. So don’t make that mistake.
Instead, set up a recurring event in your calendar for a weekly Money Date, and allocate at least one hour a week to your finances. During your Money Date, you should update your budget, review any upcoming expenses, pay bills (although you should automate those as much as possible), review your accounts for accuracy and handle any other pressing financial matters.
Make your Money Dates as fun as possible–listen to music, dance, light candles or do anything else that makes the personal finance process fun for you. Because the more fun it is, the more likely it is that you’ll continue to do it—and consistency is what counts.
2. Commit to reading about personal finance for 20 minutes a week.
Don’t try to learn everything about personal finance all at once. Instead, break up your financial education into digestible chunks. Allocate 20 minutes a week (as part of or in addition to your money date) and read about personal finance topics. Choose one topic a week and read about just that topic until you understand it, then move on to something else.
3. Talk to people you look up to.
As you begin to learn about personal finance topics such as spending, saving, credit, debt, investing, retirement strategies, etc., begin to apply what you learn by talking about it with those you admire. I often find that there is a lot of financial “chatter” out there, and also that most of what your friends and family members know about money is wrong.
So instead, talk to your mentors and other entrepreneurs you know who are successful in their financial lives. Ask them about their successes and failures. Just like in business, I’ve found I can avoid a lot of financial mishaps by learning from the mistakes of others.
Also, note that talking about money is still a sensitive subject for many people, so start small and work your way into more in-depth conversations. Be respectful of what people share with you, and always thank them for their advice.
4. Test out strategies in your own life.
Most entrepreneurs realize that the best way to learn if a business idea will work or not is to test it out. This same philosophy is true with your personal finances.
I constantly remind my clients that some financial strategies work better for some people as opposed to others. Take budgeting, for example. There are tons of methods you can use to budget your monthly income and expenses, but you won’t know what works best for you until you try.
I did this in my own life. I tested lots of budgeting systems until I finally realized that the good old Excel spreadsheet I custom-designed for myself works best for me. But I had to try many other options to come to this conclusion. Until you try something, you won’t know if it’s right—or not—for you.
5. Hire a Certified Financial Planner.
At the end of the day, everyone needs professional help from time to time. How do you know if you need to hire a CFP? You can check out this video where I share five questions to ask yourself that will help you determine if you need to hire a financial planner.
Remember, regardless of where you are on your financial journey, dedication and commitment to continued financial education are key. True mastery of any subject comes from constant practice, training and sharpening your craft.
Make sure you continue to devote the time and energy to your personal finances throughout your lifetime.
*Source: The Millionaire Next Door by Thomas J. Stanley, table 3-5, page 97.
“5 Steps to Getting the Financial Education You Need” was provided by Brittney Castro.