About This Lesson
Many people would argue that the key to a happy and successful life lies with financial wellness. Money may not be able to buy happiness, but it sure can relieve a lot of stress while enabling you to collect incredible experiences. The sooner you start taking steps towards your personal financial wellness, the better financially prepared you will be later in life. If you're feeling overwhelmed, here are five steps to get you started on your path to financial literacy.
1. Planning
Like many accomplishments, financial wellness often starts with a plan that turns into achievable goals. Start by analyzing your current financial situation with your current income. Decide where you would like to be in the coming years and figure out how you’re going to bridge that gap. If your income and goals don’t line up, you may need to consider a career change if you’re not willing to compromise on your financial goals. This may mean accruing debt and spending time on your education, but only you can decide if the risks, time and effort will be worth the sacrifices you have to make. If you’re already established in your current career or business, make sure you’re utilizing all the tools at your disposal. Algorithms and current technology have made it possible to assess countless areas of countless industries with the click of a button. To make your business as efficient as possible, you may want to utilize technology like route planning software.
2. Learning
If you’re not actively improving your financial literacy, you could be impeding your own progress. While financial advisors can be incredibly useful, you may not be at a stage where you can afford one regularly. If your budget is tight, keep up with news and articles freely available online. Utilize books and other resources that you can find at decent prices or even for free from your local library. Attending conferences, classes or workshops can offer you an interactive way of absorbing information and staying on top of industry developments. These in-person events can also help you network and grant you access to experts you otherwise would not meet.
3. Improve Your Credit
Your credit score is one of the most important indications of your financial health. Not only is this a reflection of your financial history, it is also an important indicator of whether or not you will be able to repay your debts. Poor credit can keep you from buying a house, a car and many other items. Personal credit is easy to ding and difficult to improve, so making smart financial decisions early on can set you up for success. If you’ve made some mistakes, it’s not the end of the world, and there are many methods you can use to decrease your debt and boost your credit.
4. Budget Responsibly
Your financial goals may require a strict budget, but you should also be realistic. Focus on the necessities, your savings and some wiggle room for emergencies and extra indulgences. Know your weaknesses and find unique ways to combat them. For example, a common piece of financial advice is to carry cash. However, if your favorite restaurant is cash only, try only carrying cards to avoid splurging on takeout. Once you’ve established a budget and manage to stick to it, make sure you're evaluating it regularly. Some of your living costs may rise, in which case you’ll need to get creative about spending less money in other areas of your budget. Staying on top of these changes can make it easier to adapt over time.
Most people have felt stress over their finances at one point or another. This stress can make it difficult for you to live your best life, and it’s not something you should have to deal with on a daily basis if you are proactive about your financial health. With some smart, informed decisions, you can continually improve your financial literacy at all stages of your life.
