Have you ever wondered why our educational system doesn't teach life skills? I have. In fact, I just wrote another article about it. 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? Or the fact that your student loans can actually affect your ability to buy or sell a house (yes, it's true)? 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.
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.
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.
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!
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.