Money is not difficult to understand.
Seriously. I’m not kidding.
Have you ever wondered what people mean when they say “What is your net worth?” Maybe you have always wondered how interest works. Perhaps you feel your eyes glaze over when someone starts talking about retirement.
The answers to these questions are simpler than you realize. Money in general, actually, is mostly common sense. You have probably already heard everything you need to know about money. You just need to put all the information you have heard into action.
Money is a tool. As with any tool, money only works as well as the person who wields it understands how to use it. Choosing to not learn about money will put you at a disadvantage. Educating yourself, even on the basics, will change your life for the better and put you on a path to a bright financial future.
So, where do you learn about money? This is where I come in…
I grew up in a family that was not rich (by any definition), but was educated in the basics of money. My family taught me these basics, and I thought just knowing how money worked would be enough. In December 2015, I graduated with my master’s degree and started a full time job. I was also paying off a car loan and student debt. With the new salary and benefits, I decided to get serious about my finances.
I sat down and completed my first financial audit on my finances (which I call The Great Audit), and realized I had graduated with over $100,000 in debt…
In my quest to figure out how to erase the crippling student debt, I realized I had never applied my knowledge about money. I started aggressively paying off the highest interest rate debt first, got control of my income and spending, and started seriously contributing to my retirement accounts. Now I am a few short months from having positive net worth.
MONEY IS NOT A TABOO TOPIC
I wasn’t vocal about my money situation, but I was eventually approached to provide financial advice for a friend.
After the initial shock of being asked, I was excited to help. It was only after I had promised my help that I realized I may have been too eager.
Who was I to tell anyone about finances, having just started taking an interest in the topic recently? But then I thought: How much more terrible would it be for me to turn down a friend asking for help?
Finances should be an open topic of discussion, free from judgement.
I decided I would rather share my advice with the friend, over-eagerness and all, rather than have them flounder to find the answers on their own. I felt utterly hopeless when I saw my debt for the first time. It’s a feeling I would not wish on anyone else, especially those who do not have the built-in support system I was fortunate enough to have in my family.
LET’S GET STARTED
I am not a financial expert. I was not trained in economics, and I am not certified. I’m just a normal person who taught themselves the basics of finance and applied them. Soon, I will have positive net worth. By the end of 2018 I will be completely debt free.
And you can do the same.
This is what The Financial Manual is about. I want to show everyone that money is not difficult by discussing the basics. I will discuss common concepts, and provide thorough analysis to common questions like “Should I payoff debt or invest?” and “What is the most efficient way to pay off debt?” There will also be updates on my own financial situation, so you can see how following common advice about money can change your financial outlook.
You can participate in this at any experience level. Whether you are a complete novice or consider yourself an expert, I believe you will get something out of this series. I will definitely cover the basics, and if you want me to cover something specific, feel free to ask via my contact form.
So, let’s get started on your journey to basic financial literacy. Where are you starting on this journey? Are you a financial new-bee? Or do you consider yourself an expert in all things money?
For our first chapter, let’s talk about assets.