How to Actually Become Financially Literate!

How to Actually Become Financially Literate!

Oh, what’s that you say? You were inspired by my last post on financial literacy and feminism? And now you’re jumping out of your yoga pants to find out how to actually become a badass with your money? Awesome. Glad you read it. If you haven’t read it, you’re dead to me.

You could spend years studying economics and finance at a prestigious university, or you can read the listicle I’m about to provide you. My hope is you’ll take the information I’m about to lay on you and put it into action. I’ll bet you a Chipotle burrito (my favorite) if you do everything mentioned in this listicle you will be financially literate.

Beware. As you conquer this list you’ll find yourself morphing into what Donald Trump might refer to as a “Nasty Woman”. This term is synonymous with “highly intelligent and fearless badass lady”. Embrace it.

1. Books I’ve Read Not Written By E.L. James

We’ve got to start with some must-reads. I’ve read a ton of personal finance books. I needed something to cool me off in between reading the 50 Shades series. Most financial books will bore you to tears. Here’s a few that are palatable and super informative:

The Total Money Makeover by Dave Ramsey

This book is great for people in debt (student loans, credit cards) and those who really need help getting their finances in control. I’m not a big Dave Ramsey fan per se. He’s a little too “in your face” for my taste, but his book really does a nice job of simplifying personal finance. Ramsey is brutally honest about the dumb stuff Americans do with their money.

 

The Millionaire Next Door by Thomas J. Stanley & William D. Danko

What are the habits of the wealthy? What do they invest in? How do they save? What kinds of jobs do they work? This is such an interesting read because it really digs deep into the habits and mindsets of everyday people who are great at accumulating wealth.

Think and Grow Rich by Napoleon Hill

This is an oldie but a goodie. The title sounds gimmicky and like a weird scam, but this is truly a fascinating book on financial and personal success. Napoleon Hill dedicated an absurd amount of his life to studying America’s most influential men. He then took what he learned and developed the 13 principles for success. Remember, this book was written a long ass time ago, so just ignore and/or roll your eyes at the outdated language.

The Money Book for the Young, Fabulous & Broke by Suze Orman

If you haven’t seen Kristen Wiig’s impression of Suze Orman, please take a minute to Youtube it. This book is great for the new college grad or someone in their first job. Orman totally gets what kind of struggles young people face and she’ll provide you with some actionable steps to follow. I don’t agree with 100% of what she says, some of her ideas seem counterintuitive, but she’s still a smart lady boss who’s worth reading.

2. Where Have All the Dollars Gone?

Every dollar you earn needs to have a job! In order to know what “job” your dollars have and adjust accordingly (pay bills, invest it, save it, spend it at the Magic Mike live shows, etc.) you need to know where it’s been going each month! I recommend using a budgeting app.

Mint

I personally use Mint and I do enjoy it’s simplicity and usefulness. Mint does require you input your bank account information, and I know a lot of people are wary of doing this. Mint does take cyber security and encryption seriously. They’re aware if they don’t protect consumer information, they’ll be out of business tomorrow. Mint allows me to see all of my accounts in one place. I can easily track my spending, set goals and monitor my progress, and find ways to improve. It’s a cool tool to see your overall financial “big picture”.

You Need a Budget

I’ve heard a lot of good things about You Need a Budget (YNAB). Again, this tool is all about knowing where you spend your money and giving every dollar you earn a job. YNAB is really for people who have debt. The goal of YNAB is to get you out of the red and saving more.

GoodBudget

Again, GoodBudget is another tool I’ve heard good things about. Basically, this app digitizes the old school budgeting method of labeling envelopes (“transportation”, “food”, “utilities”, etc.) and putting a set amount of cash in each envelope per month. GoodBudget will help you get organized and in control of your spending.

3. Get Your Shit Together (Literally)

This is probably the worst step because it’s a pain in the ass. I want you to take one hour per month to organize your financial documents and to track your accounts. This doesn’t have to be a super detailed process. Get a few manilla folders and organize your financial documents by category (bills, investment accounts, bank accounts, retirement accounts, receipts, etc). There’s something about decluttering and organizing that clears my mind. I hope it does the same for you. I suggest putting on some Adele and snacking during this step.

4.  Date Night

People think I’m crazy for this one, but hear me out. So often money is a source of strife and a VERY common cause of divorce. I really want to change that. I want money discussions to be a source of happiness. Here’s what I’m proposing. Tell your spouse/significant other you are having a once-per-month financial date night. Stop laughing, I’m not kidding. Prepare yourself, this is going to lead to some passionate love making. If you’re single, you can still follow these steps, although I wouldn’t recommend this for a Tinder date.

Step 1: Make or order a romantic dinner. For me, this means a Domino’s mushroom pizza with a side of Tums.

Step 2: Pop open a bottle of wine or your favorite craft beers. Personally, I enjoy turning my mouth bright red with a cheap cab sauv.

Step 3: Talk to your significant other about this past month’s income and expenses. DO NOT blame one another for going over budget or impulse buys. Be calm and collected when talking about monthly expenditures. Remember, resentment will not get you laid. Try this instead: discuss each of your financial strengths and what you think YOU need to improve on. Accountability is SO hot.

Step 4: Set goals. There’s nothing sexier than writing down your short-term (less than 1 year), intermediate (1-5 years), and long-term goals (5+ years) as a couple. Be as specific as possible. Goal setting is the new foreplay, y’all.

Step 5: This step kind of goes along with the short-term goals, but I want you and your special person to each decide on one thing you can do better next month. Perhaps you want to bring in an extra $500 with a side hustle. Maybe your partner can bring their lunch to work during the week. Again, write this down and put it on your fridge so you can hold yourselves accountable.

Step 6: You are now full of pizza, wine, and love. Your finances are in order and it didn’t cause a screaming match. There is peace in your home. We both know what happens next. You and your spouse climb into bed and immediately declare you’re too tired for sex.

5. Get Some Help

I know what you’re thinking. People who work in finance cannot be trusted!!! They are the scum of the earth!!! Unfortunately, there’s been plenty of bad apples and shady business practices that have scared away people who could truly benefit from financial planning (thanks, Wells Fargo). These bad apples have also made it much more difficult for the good and honest planners to gain the trust of clients (*cough cough ME cough cough*).

Here’s the deal: there are good financial planners in the world who honestly want to help you. So how do you find these people? First, look for advisors/planners who are “fee-only” and have taken a “fiduciary oath”. Most of the time these people will also be Certified Financial Planners (CFP). This means a few different things. First and foremost, these folks are held to a MUCH higher standard than you average “advisors”. If a person is a fiduciary they are legally obligated to do what is in your best interest. If they are “fee-only” that means they don’t charge a commission and you pay them directly (aka they won’t be tempted to sell you crappy investments and products).

These steps should get you on your way to financial literacy.

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