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7 Simple Steps to Improve Your Financial Management Skills

7 Simple Steps to Improve Your Financial Management Skills

Have you ever wondered why our educational system doesn’t teach life skills? I have. I teach communication at the university level, but by the time the students get into my class, their habits are pretty much already formed—and many of them are bad ones.

For example, maybe they saw their parents yell and scream at each other. Or maybe they avoided conflict altogether. These are not good skills to adopt. It’s really sad that they didn’t learn better life skills while they were in school.

Another life skill we weren’t taught in school is how to handle money. Once again, we learn from how our parents handled money. Were they spenders? Were they savers? Did they teach you invest? Did they teach you about the stock market or how to save for retirement? I’m betting the answer is “no” for most of us.

Just because you didn’t learn good financial skills in school doesn’t mean that you can’t learn them now. Here are some tips you can follow to get better at managing money.

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1. Make a budget—and stick to it.

Do you know where all your money goes? Do you know how much money you spend on things like going out to eat, seeing a movie, buying beer, or purchasing clothes? Most people don’t. Are you one of those people who just prays every day that you don’t overdraw your bank account? If so, make your budget. Go back through your checkbook or bank statements for the last year and write down how much you spent in each category. You will probably be surprised at how much of your money is “wasted” on things you weren’t even aware of.

2. Be a conscious consumer.

When you go to the grocery store, do you have a list? Do you look at prices? Do you use coupons? There are many online resources and apps that can help you be more focused on what you are actually spending.

Don’t “sleep walk” through life. Be aware of every single cent you spend! When people don’t do that, their money tends to just evaporate. It takes a bit of effort to look for coupons, make lists, examine the prices at the stores where you shop, but it’s worth it in the long run. And, it makes a BIG difference.

3. Balance your checkbook.

I record everything I purchase. In fact, sometimes my friends make fun of me because I’m always whipping out my checkbook to record everything I spend whether it’s at Target, the gas station, the bowling alley, or pretty much anything else.

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These days, most people just rely on looking at their bank balance online. But if you only do that, then it allows you to not care what you are spending in the moment. But if you hold yourself accountable by recording everything, then you will not over-spend or overdraw your account.

4. Have a plan and a vision.

In order to accomplish anything, you have to have a plan, right? I mean, if you wanted to go to San Francisco but you didn’t have Mapquest or a GPS to calculate your route, you would never get there! Instead, you would just drive aimlessly into nowhere.

That metaphor is pretty much what happens to you when you don’t have a financial plan. You often ask yourself, “Where did that money go?” But if you have a plan and a budget (see #1), then you will know exactly where your money has gone.

5. Think like an investor.

As I said in the introduction, our educational system does not teach us anything about how to handle money—especially when it comes to how to grow it. But think about it. Did the wealthiest people in the world just save $500 a month and leave it at that? Of course not! They learned how to turn that $500 a month into $1,000. Then $10,000. Then $100,000. And so on. You get the point.

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You can’t expect to have a solid financial future if you’re not thinking about how to grow your money. So if you start to think like an investor, you’ll see your nest egg expand.

6. Work together with your partner/spouse on the same financial goals.

If you’re married or in a partnership where you share money, then you need to work together. Since I teach about relationships, I know that one of the biggest conflicts in relationships is money! Frequently, one person will be a saver, and the other will be a spender. This doesn’t work! So it’s important that both you and your partner get on the same page about your financial goals.

Sit down together and make your budget. Meet with a financial adviser so you can learn how to invest your money wisely. But if nothing else, you need to make sure that the two of you have the same goal and vision. And that you actually stick to it!

7. Commit to saving money.

Speaking of sticking to something, commitment is everything. You can’t do anything half-way. You can’t “sometimes” do something and “sometimes not.” You have to be consistent! You have to stay the course!

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It’s kind of like losing weight. If you only occasionally eat less and exercise more, you MIGHT lose some weight. But chances are, you’ll probably just go back to your old habits. So that’s why you need to commit to saving money and building your future. Otherwise, you might as well not even bother!

If our schools taught us these financial skills, then what I have talked about in this article might come naturally to us all. But for most of us, it doesn’t. But it’s not rocket science. It’s just like anything—if you want it badly enough, you will do it! If you want to make your financial situation better you can do it! But you just need to start with the decision to do so.

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Carol Morgan

Dr. Carol Morgan is the owner of HerSideHisSide.com, a communication professor, dating & relationship coach, TV personality, speaker, and author.

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Last Updated on March 29, 2021

Life Insurance: A Secure Way To Protect Your Future.

Life Insurance: A Secure Way To Protect Your Future.

Life is a journey full of ups and downs. No one can actually predict what might happen the next moment; there are times where the happiest moments do not even take a second to turn into the gravest. Planning for your future can help you face such unwelcomed but irrepressible situations with much ease. We all want to make every memorable event of our life more special and to cherish all those moments happily and worry less, you must financially plan your future. But no one has control over life and death. Who would wish to see his family suffer in his absence? Insurance hands over the financial jeopardy of life’s happenings to an insurance company.

Importance of getting a life insurance

No one has control over life and death. Nobody would like to see their family suffering in an absence, and that’s why many people recommend life insurance. A life insurance plan is one of the best ways to secure the future of your family, even against those financial troubles after an untimely demise. These plans are safe and credible, and you could trust them for your family’s better future.

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On the other hand, a life insurance policy is a contract between a company (insurance provider) and policyholder in which the insurance provider ensures to pay a certain amount of money to the nominated beneficiary in case of the policyholder’s death during the term of the agreement. There are different types of insurance plans, and it is important for you to know the benefits of those plans such as a funeral, medical or some life expenses provided they are mentioned in the agreement.

Choosing the right insurance plan

If you’re about to select an insurance plan, you should consider some important factors:

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  • The time at which you start investing in a program and the number of family members you want to get insured. Obviously, a married man with two children has different needs compared to a single one. The number of persons who are dependent on an individual also varies from person to person.
  • The next thing you need to consider is you and your family needs. What are your child’s dream, your retirement plans, for how long would your dependents need financial support, any personal injury, etc. And do not forget those events or situations that will surely demand a huge sum of money.
  • The next thing one must consider is your current income. You should preferably choose a plan which you can afford.

Now you must be having a pretty clear idea of how to choose the best plan for you. Further, you should also compare various plans offered by different companies and numerous sites available online that help will you to compare them.

Differences between life insurance plans

Here’s a short brief of some plan categories you can choose according to your needs:

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  • Term Insurance Plan – You have to pay once, and your nominee gets the paid money under your misfortune demise. It ensures a person for a fixed time. If you survive the policy period, you do not get your premiums back.
  • Whole Life Policy – This plan continues for your lifetime. Under this, the policyholder has to pay regular premiums, until their death.
  • Endowment Policy –  In case the individual dies during the tenure, the beneficiary gets the amount assured. If the person survives the policy tenure, they gets back the premiums paid with other investment returns along with several other benefits.
  • Money Back Policy – In this a portion of the money invested is returned to the investor at regular intervals. If you survive the insurance term you get the entire amount back; else the beneficiary receives the entire sum assured.
  • ULIPs – These are the life insurance plans that offer you future security plus wealth creation options.

Many people do not opt for whole life policy and endowment policy because of the high amount of money you need to pay, while others may prefer to opt for these if they have a high life expectancy. Surely you will find the best one for you.

So what are you waiting for? Plan for your future and live a happier and carefree life today.

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Featured photo credit: aryehsampson.com via aryehsampson.com

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