Here’s how most people get educated about money:
Step 1: Grow up with parents keeping money issues away from their children.
Step 2: Take a single quarter of personal finance in high school, during which they learn how to balance a checkbook, read a pay stub and pay taxes on time.
Step 3: Become an adult, get access to credit, and start spending money.
Step 4: End up in debt.
Step 5: Figure out how to deal with it.
“Hard knocks” is the school where most people learn about money and personal finance, and the lessons there are usually incomplete and far too late.
If you’re a younger adult just stepping into grown-up finances, or older and wanting some financial education to help reach your financial goals, consider these sources for the information you need.
It’s easy to look up financial education online using search strings like “basic personal finance” or “budget education.” Payoff is one of many quality sites that offer this kind of training for free. Like all online information, you should consider the source carefully before acting on any advice you receive.
Reading websites takes time, but you can listen to podcasts about personal finance while driving to and from work, running errands, or cleaning your house. Podcasts on this subject run from 5-minute tips to hour-long classes on debt management. Some of the most popular include Money Girl’s Quick and Dirty Tips, The Simple Dollar and the Dave Ramsey Show.
Financial advising is an established career, but most of those professionals are more about helping you make solid investments than teaching the basics of personal finance. During the recession, however, a number of credit and finance coaches have popped up, offering exactly that kind of training. Some are well-meaning and a good value, while others are scam artists targeting people already proven to make bad financial decisions. The good ones are usually worth their fee — just check references before signing any checks.
Community centers and some community colleges now offer basic personal finance classes in response to how little the average American knows about money. These cover a variety of topics, including:
- Basic budgeting practices
- How credit works
- Retirement planning and other savings
- Holding yourself accountable to budget goals
- Basic tax strategies
In addition to a classroom setting, you can also take courses online. This option costs more and takes longer than the others described here, but are intensive and often give the deepest understanding of the lessons you hope to learn.
You don’t have to spend a lot of money to get educated about your finances. By using a few of these tips, you will feel more confident about handling your financial situation with success.
Photo Credit: ImaginaryGirl