Personal finances in 5 steps
When I started my financial planning seven years ago, I quickly learned that the people who are financially successful are those who devote time and energy to budgeting, managing and planning their money.
In other words, they have the discipline of having financial education and continuing to expand their education throughout life.
A financial education is something that few receive as they grow, yet it is an essential element of financial success.
If you are new to this topic or are looking to grow your knowledge, we share five easy steps to get the education you need:
Schedule weekly money appointments
Millionaires spend, on average, 8.4 hours a month planning and managing their finances, according to researcher Thomas Stanley. Although many people want to be millionaires, most don’t use the time and energy needed to make it happen. So don’t make that mistake.
Instead, set up a recurring event on your calendar to have a money appointment and devote at least one hour a week to it.
During this time, you must update your budget, review upcoming expenses, pay bills, review your account statements, and control other financial matters.
Make these appointments enjoyable: listen to music, dance, light candles or do anything that makes that moment fun. The more fun it is, the more likely you are to keep doing it.
Spend 20 minutes a month reading about personal finances
Don’t try to understand everything about finance in one afternoon. Better part your financial education into more digestible pieces.
Spend 20 minutes a week (in addition to your money quote) and read articles or books on topics related to personal finances. Pick one topic a week and read about it until you understand it.
Talk to people you admire
As you begin to learn about financial issues such as spending, savings, credit, debt, investments and retirement strategies, apply what you learn by talking to someone you admire. There are usually many people who talk about money, but most financial notions of family and friends are incorrect.
Instead, talk to mentors and other entrepreneurs who are successful in their financial lives. Ask them about their successes and failures.
As in business, I have discovered that I can avoid many mistakes if I learn from others. Also keep in mind that talking about money is still a sensitive topic for many, so start small and go deep. Be respectful of what people share with you and always thank them for their advice.
Try the strategies in your own life
Many entrepreneurs know that the best way to learn whether or not an idea will work is to test it.
This same philosophy applies to your personal finances. I constantly remind my clients that financial strategies work better for some than for others.
Let us take as an example the establishment of budgets. There are hundreds of systems and programs that can help you do this, but you won’t know which one is best for you unless you use several.
This helped me; I tried several programs and in the end I decided that I preferred a traditional Excel document. But I had to try a lot of options to get there. So as long as you don’t try something, you won’t know if it works or not.
Hire a professional advisor
Sometimes we need the help of a professional. You require it if:
– Have little or no experience in financial planning
– You don’t want to do everything for yourself.
– You don’t have an unbiased opinion
– You have a complex financial situation
– You don’t have time to do it.
Remember that mastering any discipline requires constant practice, training and improvement. Be sure to devote time and energy to getting your personal finances in order.