21st Century Financial Literacy
Tips Everyone Should Know
Being financially literate has turned from a luxury to a necessary asset in the 21st century. People got access to more opportunities – from buying stocks of large corporations to starting their own businesses with small budgets. If you want to be engaged in such endeavors or have some exciting investment and capitalization plans regarding your funds, you should know the basics of using your money. Read on to find out what those are to start your personal financial journey.
1. Calculate Your Net Worth
You may have heard this term – net worth – only when it comes to A-list celebrities and CEOs of multinational companies. However, everyone has that net worth, and the formula to calculate it is pretty straightforward. You need to know how much your assets are worth and subtract your debt. See, all those assets should be included in your calculations, as they can give you the financial basis to run some operations. For example, your home can be your office, while your backyard may turn out to be an excellent place to organize a small daycare center.
2. Use a Financial Calendar
Keeping everything in mind has become impossible these days. Information is flowing to you from all the possible sources, while you should remember only the most important bits of it. For that reason, create a financial calendar with all the upcoming deadlines to help you stay focused on the necessary tasks but also be on the right track with your payments. This especially applies to tax preparation activities when consulting a professional makes you organize everything on time. This can also help you be aware of tax breaks that the government usually offers to specific groups, like startup founders or the elderly.
3. Have Very Specific Financial Goals
Dreaming of being a millionaire is always a good thing, but when will you change your status from being a dreamer or a doer? Although some people rise to fame instantly, and their financial status changes in a day, it is much more preferable from the psychological point of view to increase your income step by step. The best proof of this is the lottery winners, who usually end up squandering their prize and not turning it into a stable income. To avoid this, set realistic financial goals, for instance, double your income in the coming two months and write down precisely how you will do that.
4. Work Your Body and Finances Out
This may come as a surprise, but physical health is directly proportional to financial gains, as some studies have revealed. The reason is that the better your health is, the higher is the level of energy and capacity you can spend on financial goals. Although movies usually depict a person working day and night to achieve their aspirations, if you listen to successful businesspeople, they all value health and sports. For instance, Elon Musk sleeps 6 hours a day and claims that less sleeping time resulted in less productivity. Hence, take this tip into account to have both your mind and body ready to reach financial milestones.