These tips come from Shawn Robey, adjunct professor in accounting and finance
Research suggests that many individuals in the United States lack the basic knowledge of personal finance. Adults and young adults are not equipped with the tools to make sound financial decisions. The lack of financial knowledge leads to poor decision making with regards to personal finances. Unfortunately, it does not stop there. Poor financial decisions can negatively impact many aspects of the individual’s life.
1. Emotional Intelligence
Financial empowerment is controlling your financial situation. It starts with understanding your emotions and how they dictate your decisions. Once you understand that feelings are an emotional driver whenever it comes to spending habits, you are in a better position to control your financial situation. It is not about eliminating your emotions, rather it’s about learning how to control them.
2. Financial Education
Many of us were not provided or given the opportunity to learn about personal finance before bad habits were established. There are many free resources available for individuals who want to learn on their own. For those who may prefer professional guidance, there are financial advisors to assist you with your specific situation. Fortunately, knowledge is a very small part of financial empowerment.
3. Setting Priorities
Identifying wants verses needs is key to prioritizing. In this journey, you may have to make adjustments to your lifestyle. By ranking the importance of purchases, you begin to identify areas where these adjustments could be made. To get something you have never had, you will have to do something you have never done. For some of us, that means telling ourselves no. Financial empowerment means telling yourself no today so you can tell yourself yes tomorrow.
4. Creating a Game Plan
It is more than a budget! This is your plan to win with money and accomplishing the ultimate goal of becoming financially empowered. Your game plan should be responsive and adapt to changes within your situation. Things may not go perfectly the first few times you try to implement the game plan. It’s okay! Just like most things, it will take some practice. It’s your money, it’s worth it!
5. Accountability Partner
For some, it is tough to hold yourself accountable. Support from another individual can help you stick to the game plan. This can be a friend, spouse, or even a family member. We typically do not like change. For some of us, change is very hard. Having a support system can make a difference and aid in your journey to become financially empowered.