The importance of personal finance education cannot be over-emphasized. The knowledge of how to manage your money and breed skills such as budgeting, investments, and savings will truly be useful to bring you to the desired path of Financial Freedom.
Before moving into more info’s about financial freedom and achieving your financial goals, let’s have a better understanding of personal Finance and how to get personal financial education.
Personal Finance
Personal finance refers to money management, as well as saving and investing. Budgeting, banking, insurance, mortgages, investments, and retirement, tax, and estate planning are all included.
Individual objectives and desires, as well as a strategy for meeting those needs within your financial constraints, affect how you approach the items listed above. You must become financially savvy in order to distinguish between good and bad advice and make sound financial choices.
Significance of Personal Finance Education
Having very good personal finance education will help you fulfil your goals. I am not just referring to your short term or everyday goals but also your long term goals.
We all know that our goals depend on every single action and choices we make. In the same measure, it depends on your income, spending, investing, savings and your personal protection such as insurance and estate planning.
In this age or era, if you are not financially disciplined, you may end up accumulating enormous debts from bad financial decisions. For this reason no one can downplay or trivialize the importance of personal finance education.
Areas of Personal Finance
There are five major areas of personal finance;
- Income
- Saving
- Spending
- Investing
- Protection
Income
The starting point for personal finance is income. It is the total amount of money you receive and can put towards expenses, savings, investments, and protection. Income is the total amount of money you bring in. Salaries, wages, dividends, and other sources of cash inflow are all included.
Saving
Savings are the funds kept away from spending. Everyone should strive to save money for large expenses or emergencies. However, this requires not spending all of your money, which can be difficult. Regardless of the difficulty, everyone should strive to have enough savings to cover any fluctuations in income and spending between three and twelve months of expenses.
Spending
Spending is a cash outflow that typically consumes the majority of income. It is anything that a person buys with their money. Rent, mortgage, groceries, hobbies, eating out, home furnishings, home repairs, travel, and entertainment are all included.
Investing
Investing entails purchasing assets, most commonly stocks and bonds, in order to earn a return on the money invested. This part of income is used to increase an individual’s wealth above and beyond the amount invested. Investing is risky because not all assets appreciate and some may lose money.
Protection
Protection refers to the steps people take to safeguard themselves against unforeseen events such as illnesses or accidents, as well as to preserve wealth. Life and health insurance, as well as estate and retirement planning, are all forms of protection.
How to Get Personal Finance Education
As we can see from the text above, personal finance education is very important. here are some very good ways to start your personal finance education journey;
Study Books
Personal finance books will be essential in your quest to become financially literate. It was critical for my education, especially since I had no prior experience with finance or investing.
Devote at least 1-2 hours per week to reading books on money management, investing, budgeting, and so on.
Good Financial Books You Should Read
There is no limit to the types of books you should read as regards finance. As a matter of fact, that should be according to your own need. However, I recommend the following books;
- I Will Teach You To Be Rich, by Ramit Sethi
- Finance for the People, by Paco de Leon
- The Automatic Millionaire, by David Bach
- The Simple Path to Wealth, by JL Collins
- Get Good With Money, by Tiffany “The Budgetnista” Aliche
- Cashing Out: Win the Wealth Game by Walking Away, by Julien and Kiersten Saunders
- Retire Before Mom and Dad, by Rob Berger
- When She Makes More, by Farnoosh Torabi
- Financial Feminist: Overcoming the Patriarchy’s Bullsh*t to Master Your Money and Build a Life You Love, by Tori Dunlap
- You Are a Badass at Making Money, by Jen Sincero
- Rich Dad, Poor Dad, by Robert Kiyosaki.
Study Magazines and Online Publishers
Books, in my opinion, are the most important, but financial magazines and online publications can also be beneficial to your financial education.
Consider Kiplinger, the Financial Times, and Fortune, as well as the numerous personal finance bloggers (like me).
Websites such as Bankrate, Student Loan Hero, BiggerPockets, GoBankingRates, and Investopedia also have a wealth of useful information, online calculators, and other tools.
Make Use of Financial Management Tools
Managing your finances and money does not have to be difficult or tedious. There is an abundance of money tools available thanks to technology and the internet.
However, in addition to assisting you in organizing and visualizing your life, these financial resources can also assist you in learning a great deal. Many of these tools have excellent learning resources or blogs. Good examples of these tools are Savology, Personal Capital, Blooom, etc
Listen to Podcasts About Money
It can be difficult to set aside time for reading. You may have a hectic work and family life, which is why podcasts are ideal.
And there are many excellent ones to listen to on your way to or from work, while doing chores, or even at work.
There are far too many great podcasts to list, and they range in length from 10 minutes to nearly an hour.
Take Courses on Financial Literacy
So, in addition to books and online publications, you can participate in a financial literacy class or course. Whether it’s through an online school, a college course, an adult education center, or something else.
If you feel you want to go a step further or need the structure to learn, this is the option for you. Many are paid, but there are some free online courses that can be excellent educators as well. Read on to see our suggestions on this.
Take Advantage of Maths
In order to be financially literate, you’ll need to master some fundamental math skills.
Brush up on your math skills or look into some basic formulas that can help you organize your money, calculate savings percentages, and budget.
I know spreadsheets can help with this, or software can do the math for you. It’s fine if you do, but understand how the math works, why the number is what it is, and how to calculate it yourself if necessary.
Free Online Personal Finance Courses to Take Advantage of
In line with what have already been stated. Here are some very good personal finance courses you can take, and there are completely free of charge.
Work Smarter, Not Harder: Time Management for Personal & Professional Productivity
This class covers topics such as learning to delegate effectively, identifying specific time management tools and how to use them, and recognizing and overcoming barriers to successful time management. The course consists of videos, readings, and quizzes. You can find this course at www.coursera.org.
Planning for Risk, Retirement and Investment
Another good course is Planning for Risk, Retirement, and Investment, a four-week course from Indiana University that includes four to six hours of instruction per week. It’s self-paced, so you can go at your own pace, and it’s free, just like the other courses on this list.
You’ll go over everything from life insurance to determining how much money you’ll need to retire. You can access this course at www.edx.org
Khan Academy’s Personal Finance Classes
Khan Academy is a non-profit organization that provides free education and frequently collaborates with schools. This Academy provides numerous free personal finance classes, with video lectures covering topics ranging from taxes to car expenses to college funding.
If you’ve ever wondered whether it’s better to lease or buy a car, for example, and you really want to get into the nitty-gritty details, this website might offer a worthwhile money class for you. Get access to this resource at www.khanacademy.org.
Finance for Everyone: Smart Tools for Decision-Making
This is available on Edx.org, an online course provider founded by Harvard and MIT that features university courses. The University of Michigan created the Finance for Everyone course, which covers finance fundamentals as well as strategies for making sound financial decisions. It’s a six-week self-paced course with enough material that you could spend five to six hours going through it.
Brigham Young University’s Personal Finance Courses
Brigham Young University’s free online personal finance classes, which offer beginner, intermediate, and advanced-level courses, contain a wealth of information.
Users can gain free access to the coursework and learn through videos and money-management assignments. The class takes a hands-on approach, covering topics such as financial independence tips, saving strategies, stock basics, and tips for setting and achieving long-term financial goals. Get Access to this course at personalfinance.byu.edu.
Start Taking Action
The importance of personal finance education cannot be over emphasized. Take advantage of the resources listed in this article. Want some more info to feed your mind with, check out this article on good financial habits.
