The More You Know, The Better You Save

by Jeremy Biberdorf

If you have kids, you know that kids come into the world asking "why?" If you think about it, that is a very good question. Why are we here? Why should I do what you tell me? Why do I have to go to school? Without understanding a good reason "why," it's almost impossible to motivate yourself to action. Very few people would go to the gym, for example, if they didn't know it would likely make them fitter and happier.

The same goes with personal finance. If you don't have the basic knowledge required to save, pay off debt, invest, and spend wisely, you probably aren't going to do any of those things. This is the biggest problem for many people with money problems. They might know the word "budget" but have no actual experience making a budget of their own.

For people in this situation, sensible personal finance is totally unknown, and we're scared of what we don't know. Symptoms of this condition include avoiding looking at the balance of your checking account because you're scared of what it'll be, routinely missing payments on credit cards, or breaking out in an anxious sweat when your friend asks if you invest.

Fortunately, there is a cure for financial ignorance. In as little as ten minutes a day, you can read the best personal finance blogs, watch an educational YouTube video, or have a quick conversation with a trusted friend who knows more than you about money. It's easier than you might think to learn the skills necessary to be financially stable.

Related: What Financial Ignorance Could Cost You

When people are ignorant of a subject (and they know it), they tend to think that the subject is totally beyond their intellectual capabilities. At least, this is the excuse they use. In reality, spending and saving in the right way aren't difficult concepts, but it can be hard to break old habits. Even in this case, learning from the success of others is still the best way to succeed.

The good news is that it's getting easier than ever to do the right thing with your money. Apps and automated services like Betterment investing are taking the bookkeeping and guesswork out of personal finance. With a few clicks, you can always know how much money you have, where it is, and where it's going, even when you're on the go.

What's more, people are talking about this subject more than ever in the media, online, among friends. People realize that Social Security programs might not necessarily be enough for retirement. Others wake up to the reality that no one is going to pay off their debt but them. Whatever motivates you to action, it's important to arm yourself with all of the information and methodology you can squeeze into your brain, because these are the thoughts that will actually move you to action and keep you on the right track once you begin. Learn a little bit every day and you will be surprised how much it makes a difference in your financial behavior, with little conscious effort.

Are you heading for debt trouble? This simple checklist can help you find out and provide options for doing something about it.

Another great thing about doing the homework to get better with money is that this behavior is contagious. When people around you notice that you're not throwing your money around, they might unconsciously start to do the same. People like to do things together, and when someone notices that a friend has discovered a useful tool for self-betterment, they'll be more likely to do the same thing. Stick with your learning and saving. The more you do it, the better it'll be for you and the people you care about most. Happy learning!

Take the Next Step:

  • Tired of being in debt? Here are 4 easy ways to pay if off.
  • Rethink what your money can do. Better manage and grow your wealth with Betterment.
  • Keep your finances on track by visiting our money section where you'll find tools and resources to help you with your finances.
  • Stop struggling to get ahead financially. Subscribe to our free weekly Surviving Tough Times newsletter aimed at helping you 'live better...for less'. Each issue features great ways to help you stretch your dollars and make the most of your resources. Subscribers get a copy of Are You Heading for Debt Trouble? A Simple Checklist And What You Can Do About It for FREE!

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