Do you realise that financial literacy is important, but struggle to be interested?
Do you wish that you wanted to know more about finance stuff, but just don’t care?
Do you fight your eyes glossing over when some says the “f-word”?
Answering “Yes” to any of these questions, means that you are in good company and this post will help. With gentle exposure, you can become more comfortable around finance jargon and terminology.
I started Reaching Aspiration with a focus on finance literacy, as it is what triggered my transformation two years earlier. Like many Chartered Accountants, I thought I knew what I needed to do. I didn’t. I still don’t have all the answers, but I have improved my chances of making the right, or rather, better choices.
I am a “f-word” evangelist. I usually find people want to be interested, as they know it’s important. I explain to them with passion the importance of putting a plan together. The next day, I send a few simple steps they could take which would dramatically improve their financial prospects. Then, virtually every time, nothing happens. The next time I see them, the subject is avoided. They have already accepted defeat.
Well, I won’t. I will keep banging my drum for the few people whose life is changed because of my persistence and perseverance.
It is easy to proclaim that “the government (school; parents; anybody else;) – didn’t they tell me!” or the often humorously quoted “I really found what I learned in school useful during this year’s calculus season.” Fair point, but it’s time to move on and to take ownership for your future; nobody else will. “Why didn’t anybody tell me” will not change your prospects, only you can.
There are two ends of a spectrum to learning:
- Total immersion; &
- Gradual introduction
Of course there is a a load in-between. The first is more rapid and traumatic. The second slower and calmer. The problem with both, is that it’s easy to loose momentum through fatigue and other distractions.
I don’t want to add to the trauma, so how about going with a gradual introduction.
Like overcoming the fear of water, before learning to swim. Let’s start with getting more comfortable with the terms, rather than becoming financially literate. So, no specific plan. No specific output, simply help become more at ease.
If you have ever been to a new country with a different language, the names and words are hard to retain and distinguish when you first arrive. Then after a while, it becomes easier, they start to stick. It’s time to become more familiar (not fluent) with the language of money.
I am challenging you today. Not to create a financial plan. Not to try become a finance wizard. Simply just to commit 10-15 minutes per day to reduce the angst, the fear, the discomfort, the anxiety you feel when it comes to talking about your finances.
Over the next 7 days set a reminder (or if you prefer set a weekly reminder and do it over 7 weeks) to come back to this post or simply sign-up for e-mail reminders below. Then all you have to do is one of the challenges below each day. That is it only 10-15 minutes a day of gentle exposure.
Day 1 – Write down everything that you spend your money on over the next week in a little notebook that can fit in your pocket or in Evernote. This is about becoming a more aware of what you spend your money on. It is also about creating a moments hesitancy before spending, even if it is just to avoid the annoyance of having to write it down.
Day 2 – Speak to someone who is retired or at least 50 years old. They have lived through turbulent economic times. Ask them what was the best financial advice they have ever received, the worst and the one piece of advice they would give to themselves at your age. Then share this advice with at least one other person. Sharing the advice will 5x the impact of merely listening to it. Why not share it on our Facebook page or in the comments below?
Day 3 – Learn about Compound Interest, Google it, read about it here. Don’t ignore the Compound Effect, just conceptually understanding it is not enough. Internalise it.
Day 4 – Spend 10 minutes scanning through last month’s bank and credit card statements. Any “AHA” moments?
Day 5 – Talk about your workplace pension with a colleague who you reckon has “got their act together.” Then spend 5-10 minutes checking your pension, for some this may mean setting up log in details, others just logging in. See what you are invested in.
Maybe answer these questions:
- Am I maximising my employers contribution?
- Are my fees being paid around 1% or less?
- Still interested, read this.
Day 6 – Buy one (or all) of the books below. This idea is stolen from Ryan Holiday, who stole it from Nassim Taleb “…collect the books you haven’t read. It’s a testament to what you don’t know…” Even if you don’t read them, at least you are signalling to your sub-conscious that you want to learn about it. I’d suggest reading them though.
Day 7 – Read (or even glance through, it’s about exposure) these blog posts, in order.
- How to Accumulate Wealth – Slow and Steady
- Money. PANIC! Personal Finances in 7 easy steps
- Then, if relevant – Should I pay off my mortgage quicker?
Or take our financial literacy course for free.
To wrap up, consider if you need a financial adviser. You can delegate, but you can not abdicate your responsibility. Remember – “Why didn’t anybody tell me” will not change your situation, only you can.