3 Simple Things You Can Do Right Now to develop your financial education (part 2)
This is the 2nd installment of a 5 part series on Financial Education. Before reading on you might like to read the introduction here.
There are so many misidentifications and misapplications about what financial education actually is. There are many definitions floating about, and most are referring to a knowledge and a set of skills that allow people to manage their money wisely and to function within the supply and demand of economic theory. That’s not educating yourself about money; that’s learning how to locate yourself in the financial structure of what everyone else believes reality is. This type of education carries certainty and predictability—but it doesn't create a space for the discovery of new and different possibilities.
True financial education is a process of revealing and recognizing what you are currently creating as your financial reality, where you are in your life and then acknowledging what you would like to create as your future. To educate yourself about the money you need three parts to your education:
1 Taking stock of where you are right now. This is about looking at how things really are, instead of how you would like them to be. Having a clear picture of where you are right now is the most important process to financial education. The first thing you need to do is to discover exactly where your finances are now - what your current revenue streams are, how much money you have, how much you owe, and what your net worth is.
2 Know what it costs to live your life exactly. This is not about having a budget, but you have to sit down and write out how much it costs you to live each month. You need to know your bare minimum or fixed expenses, your average or normal expenses, and your ideal expenses, allowing for some luxuries. This process is to calculate your expenses and look at what's currently happening in your finances - how much money is currently being spent. That’s your rent, utilities, gasoline, clothes, entertainment, and other monthly expenses. Identifying what it costs you to live each month allows you to see where you’re spending money, what you’re spending on and how you’re spending it, so that you understand where your money is going
3 Knowing what you would like to create as your life and as your future and how much will it cost to create the life you desire. To create the life you desire you have to know what you want your life to be about. You have to become aware of what that life would be like for you. Knowing what's important to you and how you want your life to be is an essential element in educating yourself about money and finance. When you know what you would like to create as your life it will be relatively easy to work out what you need to be and do different and how much wealth you need, and how much you need to generate each month to create the life you desire.
The truth is that you are the creator of everything in your life, including your financial situation. This is very good news because if you are not happy with what is showing up and since you have created it, you can uncreate and change it too! By doing these 3 tasks, you will become aware of the information you require, what you have created and what needs to change in order to achieve what you want to create as your life.
This blog is part 2 of a 5 part series on Financial Education created to inspire you to see your financial world in a different way and to make positive changes in your financial life.
Other Blogs in This Series
Financial Education series Part 1 - Financial Education. Why is it so important?
Financial Education series Part 2 - 3 Simple Things You Can Do Right Now to develop your financial education
Financial Education series Part 3 - What it really takes to become educated about money!