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Financial Fundamentals

6 Ways to Become Financially Smarter Than 40% of the Population

Alexandra Ardelean

A viral video claims that 40% of the world is financially illiterate. This lack of financial literacy costs the average adult approximately $10,000 in 2022. In this article, I will share six ways to become financially smarter than 40% of the population.

Implement a Zero-Based Budget

A zero-based budget is a budgeting method where income minus all expenses, including giving and saving, equals zero. Every dollar of income should be assigned to a category in a zero-based budget. This method ensures that every dollar has a purpose and helps individuals manage their money effectively.

I recommend using the EveryDollarABudgeting app for budgeting. It's user-friendly and helps you track your spending and savings easily.

Consume Financial News Regularly

To become financially smarter, it's essential to stay informed about financial news and market trends. However, it's important to consume financial news critically and not be swayed by fear tactics used in media.

I don't recommend constant exposure to news because it can lead to fear and anxiety. Instead, I suggest consuming financial news regularly but with a critical eye. Bring personal context to news headlines and consider how they may impact your financial situation.

Become Wise with Investment Decisions

Investment decisions can be overwhelming, especially for beginners. To become financially smarter, it's crucial to make wise investment decisions based on historical data and proven strategies.

I recommend sticking to a proven investment strategy plan that aligns with your financial goals and risk tolerance. For most people, mutual funds are an excellent option for diversification and peace of mind in investing.

If you need help with investing, connect with me at Incorpo.ro/smartinvestorpro.

Consume Content from Trusted Experts

There is an abundance of financial content available today, from books and podcasts to YouTube channels and social media accounts. To become financially smarter, it's essential to consume content from trusted experts who have a track record of success.

Personally, I trust Jade Warshaw, George Campbell, and Dave Ramsey as money experts. I recommend reading "Total Money Makeover" by Dave Ramsey if you're new to personal finance.

Research Savings Options

Once you've saved some money, it's important to research where to put your savings for maximum returns. For short-term savings goals, consider high yield savings accounts or money market accounts. For more active investing options, look into Vanguard accounts and index funds.

Know Your Personal Money Habits

Finally, becoming financially smarter means understanding your personal money habits. We all have natural tendencies when it comes to money, whether it's overspending or being too frugal. By knowing your money habits, you can make better financial decisions that align with your values and goals.

Understanding personal money habits is also crucial in marriage. Both partners should know their natural tendencies with money so they can work together effectively with their finances.

Which tip will you try next? Keep me posted on your progress!

Don't forget about EveryDollar! It's an amazing budgeting app that I highly recommend for anyone looking to get control of their finances.