It probably isn’t surprising to you that only 1 in 3 states requires their students to take a personal finance class to graduate. Unfortunately, this hasn’t really changed much in the past few years.
And even when personal finance is taught in our schools, it often lacks the why behind money which helps the topic connect in a tangible way.
So, how do we change the sad state of personal finance knowledge in this country while developing people who are ready to make savvier financial choices? While teaching the basic tenets of saving your money for a rainy day and avoiding high-interest debt are wonderful, changing your money mindset, actions, and skills are actually a long-term play for developing a comprehensive financial knowledge.
How to develop the right Money Mindset, Money Actions and Money Skills
Your Money Mindset is the thoughts and feelings formed about money as a result of what you’ve heard, observed and experienced during the course of your life.
For example: Look at your past money story. This has an outsized impact on how you presently treat and manage your money. Not addressing that history has ramifications for you now in your life.
Your Money Actions are the traditional and non-traditional actions you take to not only manage your personal finances, but to help reach your financial goals.
An example of a traditional money action is negotiating your credit card interest rates. A non-traditional money action would be having the commonly feared “money conversation.”
Money skills are the skills, both traditional and non-traditional, necessary to manage your financial life.
Traditional money skills include what is commonly known as budgeting. A non-traditional money skill would be to understand what intensity of budgeting you need in your current season of life.
Tapping into these three realms can help you get out of the money rut you are in and begin to think about your finances in a more realistic way. Here are some actions you can take right now as you seek to make lasting changes.
Three actions you can take today
Action #1: Take a moment to reflect on 5 money memories
These money memories can be good or the bad. But you need to be sure to write them down. Being thoughtful about our money history can help us avoid making the same mistakes again.
There are bonus points if you take a moment to answer the question for each money memory: “What kind of an impact has this money memory had on me?”
Action #2: Create your own money talk cheat sheet with three money conversation topics
Money conversations are not limited to a conversation about whether your spouse paid the internet bill this month or not.
What are three topics for money conversations you can use to delve deeper and build your financial confidence? This can include recent wins, a money tip you implemented which has been beneficial, a money memory that had a big impact, and/or the best money lessons you have learned. Having those conversations with important people in your life can lessen the taboo that sometimes surrounds money and inspire confidence in your own money journey.
Action #3: Decide what new items you want to add or items you want to expand upon in a future budget (I call it a dream budget)
What areas in your current budget would you like to contain more wiggle room? What would you love to add, but currently don’t have the income or room to do so? What would it take to make those dreams a reality? Writing down these aspirations can help lead to planning and action — and eventually payoff!
Implementing these three actions on a more regular basis can take the stigma away from your finances and empower you to be in control of your own life. You probably already know that you should be saving more or paying down your debt more quickly. Changing your money mindset, actions, and skills can help you implement that knowledge and supercharge your ability to follow through and master your money!
Jen Hemphill, a military spouse & proud bilingual Latina, helps women who are tired of the traditional money advice gain a renewed sense of control, confidence and freedom in their financial life. She is a Money Confidence Coach, an AFC® (Accredited Financial Counselor) and host of the Her Money Matters® Podcast. Her first book Her Money Matters: The Missing Truths From Traditional Money Advice helps to fill the missing gaps for when you are financially stuck.