What is financial intelligence and how does it impact our lives? Financial intelligence is just a fancy way of saying having deeper awareness about money than the average person on the street. It’s being knowledgeable about money so that you can make your money work for you. It entails having an understanding of money matters in such a way that you are familiar with the workings of how money impacts your everyday life.
Money affects us everyday. We are actually making monetary decisions consciously and subconsciously all the time. For example, when you need to buy a gift for your kids; or you need to buy a cup of coffee; or you need to buy gas or groceries—in all of these instances you are exercising financial intelligence.
These decisions are affected by our capacity to bear the cost of living, which is affected by our finances. Our finances impact even the most mundane thing in our life. So, it is worthwhile to spend some time and organize our finances.
One of the most important aspects of managing our money better is our relationship with money. Do you consider money important, or do you believe that acquiring money is not important? I believe that having enough resources at your disposal helps you to express your will as a human being on this earth. If you have enough resources you can do a lot of good and also a lot of damage if that is the path you choose. Money is not good or bad. It is the way it is used by human beings that can turn it into good or bad.
It is very difficult to be financially intelligent if you don’t believe in its advantages. You have to realise that your relationship with money runs deeper than just earning money and spending it. Every successful person understands the role of money and how to maximize it. I searched for literature on financial intelligence and realized it is a relatively new area of finance with most of the writings available focused on improving the bottom line of companies.
I believe that you can use the same knowledge and by applying it to your daily life you can turn your finances around.
I am not here to replace your Financial Advisor but I am here to talk about real life solutions that can help you better manage your money and hopefully make you a happier and better person in the process.
Tips on becoming more financially intelligent:
– Know how much you earn (if you rely on someone else’s income, find out what your monthly budget is, so that you can better understand and plot out how to divide it up
– Know how much you need on a monthly basis to live comfortably (this will vary with individuals but learn to recognize the difference between your needs and wants)
– Know how much you pay in taxes.
– Know how much to save.
-Create an emergency safety account at your bank.
– Know how to access/use your emergency funds.
– Have a monthly budget and stick to it
– Be disciplined. Don’t live on credit. (You don’t want to mortgage your future for trivial things you get today).
– If you are not disciplined enough use a cash jar.
All of these tips will help you to think about the impact of your finances, and become more financially intelligent! Get to it!