Financial Literacy

Money makes the world go around. Cash Rules everything around me. These are the sayings we know to be correct, but do we really understand how to handle our earnings? We as adults know the importance of money, but I've noticed a lot of us still have no understanding of how to manage money and make it work to benefit us. I live on a very strict understanding of living within my means. Makings purchases to treat myself as and when I feel like I can and understanding that FOMO (Fear of missing out) is just another one of those gimmicks to get you to participate in something that does more harm than good in the long run. I speak to many people, some who have a larger income than myself, yet I still hear the complaints of financial struggle. The problem I believe some people are suffering with is, because of the society we have been raised in, we are consumer addicts. Whether it be clothing, the latest phones and gadgets or the most popular services available (Hulu, Netflix, iTunes, Tidal). We feel we need to have everything going and unfortunately, we will do this at any cost. I don't know how many of you have heard this, but you will hear people say "That guy/girl got the lastest car but sleeping on a mattress at home" or "They wear all that designer but still live at home with their mum". Now, there are a lot of people who make those same purchases but have their situations in order. The ones who don't like the statements I just mentioned simply make poor choices due to financial illiteracy. I'm not an expert but sometimes I feel like the average person can be overwhelmed with an expert telling you how to save and spend your money. It can be looked at as it's easy for them to say it because they don't understand the life the average person is going through. So I thought I would give an intro into what small things people can do to get a clearer understanding of what they may need to do to get their finances in order. 1. Make a list of your Outgoings: Either write it on a piece of paper or list it in a spreadsheet. With a calculator, or if you know the add and subtract formula on a spreadsheet, deduct your expenses from your income and put the remaining amount at the end of the list. What this will do is allow you to take an honest look at how much money you spend on specific things and will allow you to question if it's really necessary. Are iTunes AND Tidal really needed? Are Netflix AND Hulu AND cable all necessary? Is a mobile contract with unlimited internet really needed if you have a high-speed internet provider at home too? These are just small examples but then if I was to got deeper you would then question yourself like "Damn I really spend 200 on Weed or Alcohol and Cigarettes a month do I really need to do all that? Now I'm not saying don't have a good time but if you're struggling at times you have to look at those expenses like they can really be adjusted and cut down, maybe even stopped. 2. Decided what you don't need: With the list set out in front of you, start to deduct the things you would consider giving up and see how much it impacts your earnings. If You deduct certain service providers how much will it improve your leftover earning? Try and deduct those things for 6 weeks as 6 weeks can create a habit. See how you feel after the 6 weeks and decide then if you need that expense back or not. 3. PAY YOURSELF!!! This is the best way to save money for a rainy day or even for something you may specifically want. Set up a savings account and when you get your income make the first payment be to yourself. You are the most important debit you have of all your expenses this will also allow you to not be living pay cheque to pay cheque. It will give you some breathing space to know that you have some money set aside just in case you need it. It will also mentally take the pressure off you allowing you to relax because you know you would not have to worry if something unexpected happened where you lose your job or you're unable to work for a small amount of time. Last but not least. Live within your financial means: The pressures of society make you think you need to have the latest and you need to look like your getting it but if you look at true wealthy people they look like they shop in the most basic clothing stores. They understand their money can be spent on more important things and that clothes and shoes are just to cover you. If you want a nice pair of sneakers, go ahead but if it will set you back for the rest of the month till your next pay cheque then the ones your wearing right now are pretty great. It's okay not to have the latest if it means you eating well or not having to ask others for money to borrow. Understand that you are setting yourself up to be financially stable so that when you reach a bigger salary your habit will remain the same and then you can make bigger purchases or invest and not have to worry about being strained financially. Understand that the information above is a small intro in ways you can start understanding your finances better there are other methods but this is a very simple one I find extremely useful.

Don't for a second think that you can out-earn your outgoings if you have no financial structure.

The book I would suggest as a good startup is "Broke Millennial" Written by Erin Lowry. It gives you a very detailed understanding of how money is being misspent, how to build your credit and what this generation needs to do better to understand their finances. I hope this helps and leave a comment if you feel like this helps you in any way. TMC.