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4 Tips to Develop Your Financial Intelligence

by FlexInvest 2 months ago in personal finance
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It is all about having an appropriate knowledge of how to manage your money.

There is a topic that is not talked about as much as it should be. It is financial intelligence. No, it has nothing to do with being a billionaire and owning one of the most important companies in the world.

It is about having an appropriate knowledge of money management and being able to rely financially only on yourself.

Humans have multiple types of intelligence. If you think you don’t have financial intelligence just because you’re not good with numbers, you are wrong. You have it, you just haven’t developed it.

It’s a worldwide problem that financial intelligence is not taught in schools. It is one of the most important subjects that would prepare everybody to have a financially stable life in their future.

You might be thinking - Oh, how could I develop my financial intelligence? - Don’t worry, here you will learn everything you must know about it.

What is financial intelligence?

Before learning how to improve your financial intelligence, let’s understand completely what it means.

Financial intelligence is the ability you can develop to get new ways of earning money, optimize the money you spend, and most importantly, reach a financially stable life with potential economic growth.

Read also: How to Become a Millionaire Improving Your Money Habits

Financial intelligence can open new opportunities. For example, you can be a person that loves sports. You never stop talking about sports, and you even post sports news on your social media. If you use your financial intelligence and relate it to your love for sports, you’ll get new ways to earn money by doing what you love.

You can start a sports blog or you can create a YouTube channel where you talk about sports. Any idea that you think of and that you could get some extra money from it, means you used a part of your financial intelligence.

Other than that, an important part of financial intelligence is your ability to handle money. How do you organize your money? Do you keep a monthly budget? Are you a saver or a spender?

As you can see, being financially wise is not all about making tons of cash. As a wise man once said, is not a matter of how much money you earn, but how much of it you keep.

How to develop your financial intelligence?

We are going to give you four key tips to develop your financial intelligence.

1. Have self-control

Learn how to manage your money. It’s important that you control your expenses, they must be lower than the total amount of your income.

We get it, among all the bills and expenses, managing money can be stressful. However, there’s a simple way to make it easier - by budgeting. Using a simple budgeting strategy like the 50-30-20 rule can help you gain an insight of your cash flow and have a better control over your expenses.

2. Never stop learning

This might be the most important tip to develop your financial intelligence. You should be constantly feeding your mind with knowledge about any field you want to excel in. Don’t get tired of learning something new every day.

With today’s technology you can have free finance classes! Watch finance videos, download finance ebooks, and take a look through the FlexAcademy library to expand your knowledge.

3. Talk about finances

When you speak about what you’ve learned, you are constantly reinforcing the knowledge.

Talk to your mother about home expenses, talk to your friend about your budget for that night out… It really doesn’t matter who you talk to, as long as you do it.

4. Watch and study some real life cases

You can start by applying what you’ve learned to your current situation. Identify your income sources, the amount of money you spend every month, and how much of it you are putting towards your savings.

Also, take advantage of economic news and analyze the situation your country is going through, or study the financial statements of the companies you love to understand how a real-life business functions.

Know your progress

After reading all of this, you might be thinking - So, I’ll try to develop my financial intelligence. But how do I know that it is in fact developing? - Good question.

Once you develop your financial intelligence, you’ll notice certain changes in your daily life. For example:

  • Your income is higher than your expenses.
  • You’re looking for new ways of making money.
  • You plan your financial future.
  • You save money with a goal in mind.
  • You want to invest and create a new business.
  • You spend your money wisely.

As simple as that. Any positive change you notice on your personal finances is a good use of your financial intelligence.

Make sure to train your financial intelligence to develop it. It’ll open new opportunities for you and most importantly, it can help you achieve your personal goals.

Check out our other articles in the FlexAcademy blog to learn more finance tips like simple ways of saving your money. Good luck with your adventure in the finance world!

personal finance

About the author

FlexInvest

Investing and finance made simple.

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