We all must have certain skills to improve our financial future. You need to learn how to manage your wealth, especially if you have poor money habits.
Financial skills allow you to make intelligent decisions with your money. Everyone should be capable of doing the right things with their money to have a good and successful financial outcome. When you have the right skills, you can comprehend the major financial problems most people confront such as – emergencies, debts, and investments.
Here are the 6 most important financial skills you need to master to improve your lifestyle.
1. Balance a Checkbook
It is important to learn how to balance a checkbook. The good news is that today there are many financial software options and online tools that can help you with this. You don’t need to re-create the wheel here. Stick with the programs that specialize in this option. There are even plenty of free options available.
But, why it is important to balance a checkbook?
Because the balance the ATM gives you, or the information on your bank’s online website does not show the most up-to-date amount in your account. They may not be showing pending transactions. For example – I actually do not write checks anymore but I do online payments. What I have physically in my account today doesn’t necessarily keep in mind what I will have after payments before the next payday. I need to keep an eye on it at all times.
Having and following a budget is one of the most important financial skills you need to have. When you have a detailed budget you know where your money is going and you can decide where you want your money to go. This will help you to stop watching it disappear.
To have a budget you need to list all of your incomes and expenses and most importantly you need to control spending and work to stay within your budget every month.
It is important to understand that when you have unexpected expenses you will need to find creative ways to spend less in other areas, such as traveling, to recover and stay on budget.
If you want to start your budget you can revise your bank statements and credit card bills from last month and write down how much you spend by category. Some categories may be food, clothing, pets, entertainment, transportation, housing, utilities, etc.
Learning how to negotiate is an important skill you need to have if you want to get the best deal when you are buying and selling anything.
When you know how to negotiate you can reach an agreement that could help you save money or earn more. Excelling in this skill could have the added side effect of helping you to negotiate a raise in your career.
Here are some tips on how to become a successful negotiator:
- Learn how to say no. If you want to be a successful negotiator you need to be willing to say no. Having the ability to walk away will help you get a better deal.
- Understand the market value. To become a good negotiator you must be reasonable and understand the deal from the other person’s point of view.
- Be astute. It is important to pay attention to the other person to determine what type of offer they are willing to accept and use this information to negotiate a good deal.
4. Learn How Your Bank Works
You need to understand how your bank works and the different account types they offer. Make sure to learn the difference between checking, saving, money market and certificates of deposit so you know which one you want.
Always ask which fees your bank charged you and if there is any way you can’t avoid them.
5. How to Pay For College
You need to understand there are other ways to pay for college besides student loans. Some options include:
- Financial aid
- There are many you can apply to even if you are not a perfect grades student.
- Work-study options
6. Alamo Associates – Debt and Interest Rates
If you are one of the many people who carry debt your best move is to pay it off as soon as possible. This way you are reducing your interest payments and you will have extra money to invest or save.
While you are debt-free, you need to try to keep your interest rates as low as possible. You should know that most credit cards have higher interest rates and you can easily end up paying 15% or more.
So, keep track of interest rates on your accounts and whenever is possible find good deals on balance transfers.
Finally, if you want to be financially successful you need to do more than just reduce spending and save money. You need to invest money.
Investing is the only way you can start earning money and change your lifestyle even with small amounts. So change your mentality and keep investing the money instead of spending