There are so many people who believe that they’re ‘just no good with money.’ But guess what, you are good with money. What you need could just be a little development in financial literacy. 

My heart always sinks a little whenever I hear someone say this.

Having spent thirty years as a financial advisor, I know all too well that no matter how much we wish it wasn’t true, money affects nearly every single meaningful part of our lives - our work (and therefore our purpose in life), our relationships, even how we see ourselves.

Because of this, money has become mired in extremes - some think it’s the ultimate good, others insist it’s evil incarnate.

But what if I told you there’s a different way of looking at money? A better way that can make sure that you control money and not the other way around.

Here it is: money is like a language that everyone can learn.

Let me explain my story of developing financial literacy.

At a very early age, so early most of us won’t be able to remember it happening (unless they were a baby genius, of course), we learn that the sound patterns we hear from the people around us are the keys to understanding the world and communicating with others around us.

We come to understand this as our native language.

In time, we begin to differentiate from our parents and teachers and develop our own style of speaking. We call it our voice. And we believe that it reflects something about who we are, on both the inside and outside.

What we don’t realize though, is that we develop our financial patterns and behaviors in almost the exact same way.

We inherit ideas about how money works from the people we grow up with and, without our awareness, these ideas shape how we perceive and interact with money.

In other words, we have an innate money language. As you’ll discover in my Money Personality Quiz. 

Learning how to be good with money comes down to two things:

1. Developing a greater and more accurate understanding of how money works; and
2. Being able to use it effectively.

Here are 5 easy steps to help you develop financial literacy:

 1. Self-Educate

When I say self-educate, I don’t mean to imply that you need to build a body of knowledge equivalent to MBA training.

In fact, you don’t need any kind of major training to develop your finances.

Why?

Because more often than not, the best lesson you can learn with your money is that you actually already know how to manage it effectively.

The principles are simple:

• Live within your means
• Don’t spend money you don’t have (even if it’s money you expect to earn)
• Make sure that you save money each month instead of spending it on items you don’t need

Of course, this is easier said than done. Especially for people with huge amounts of debt.

[Side note: In instances of huge amounts of debt, it’s all too easy for people to spend money as soon as they get it because they know it’s going to be gone no matter what. However, it’s important to remember that, for any debt, you need to have a plan for getting yourself out of it, and remember that any money coming in should be put towards that plan. Debt is not inevitable, no matter what you may have been led to believe.]

However, debt or no debt, the difficult part about money is managing the emotions it’s tied to.

Educating yourself about your own money beliefs, and investigating which ones are holding you back, will be some of the most important financial lessons you’ll ever learn.

What’s one way to get started?

2. Write Your Money Story

As I mentioned earlier, we all have a money story. And like all stories, they consist of a past, present, and future.

Your money story doesn’t have to be complicated. Or win you any Booker Prizes. You don’t even have to write it down on paper.

But if you want to develop your financial literacy, it will help to:

• Dig into the lessons you were taught
• Fully acknowledge the situation you’re currently in
• Familiarize yourself with your realistic, but achievable, aspirations for the future

In doing so, you’ll begin to see new connections and patterns that you might not have seen otherwise, which can give you insight into the current action you need to take to change your circumstances. For example, if you want to become a millionaire, but remember being taught a long time ago that money is evil, you’ll know that you can let go of the old belief and replace it with a new one that reflects where you want to be instead of where you came from: that money can be good and lead us to the life we want for ourselves..

I also encourage you to share your story with others. Doing so helps you come to terms with the past, gain acceptance in the present, and be held accountable for reaching your goals in the future.

3. Practice, Practice, Practice

There’s a popular saying (attributed to many various athletes and performers, though usually credited to Vince Lombardi), with universal applications, but especially for financial habits: Practice doesn’t make perfect. Practice makes permanent.

In other words, when we repeat something on a daily basis, it becomes part of our conditioning.

What many of us don’t realize is that we already practice money habits on a daily basis. The question is whether or not they’re good for us.

For instance, avoiding looking at your bank balance is a financial habit, but it’s not a healthy one. Long-term, it’s likely to result in losing track of spending and potentially building up debt.

On the other hand, if you check your finances every week to see where your money has gone, you’ll not only begin to see spending patterns you may have been unaware of (i.e. forgotten subscription fees, unnecessary purchases, etc.), but you’ll be able to manage your finances much better in the coming weeks.

The main goal when it comes to dealing with your finances is to find something that works for you, but that’s also going to put you on the right track to meet your goals (you may find my Spending Intentions Worksheet a valuable tool for this)

From here, it’s simply a matter of understanding that the more you practice becoming efficient with your finances, the better at managing them you will be.

But, remember that when it does come time to managing your finances, you’ll first need to…

4. Manage Your Money Emotions

Let’s face it, dealing with finances can get messy. Not just because the numbers can be difficult to keep track of (especially when you’re applying new, healthier habits to manage them), but because money is enmeshed with so many difficult emotions.

The emotional component of money is just like the emotional component of language - we all know that beyond just letters and numbers are hidden meanings that have the power to either elate us or ruin our days.

Unlike language though, the hidden meaning behind money usually comes down to the same (very damaging) idea, over and over again - that our net worth is a reflection of our self-worth. But just remember - this idea is absolute garbage. Your self-worth has nothing to do with your net worth, and the only way this monstrous thought can have any power over you is if you believe it, which you never have to do.

There are many ways to help manage emotions when it comes to finances. My favorite is meditating. I’ve found it to be incredibly effective over the years as it calms the central nervous system, which helps put me in a calm enough frame of mind to make wise decisions (you can check out some of my guided money meditations here). Some other effective methods include journaling or seeking advice from a mentor or trusted friend.

Once your money emotions have been addressed, then the difficult part is really nothing more than sitting down and completing the tasks on your to-do list. And if you find yourself struggling to complete them, then…
 

5. Focus on The Goal in Front of You

You’ll never become fluent in a language if you don’t speak it. And the same is true when it comes to developing financial literacy.

This means that we can only develop financial fluency by completing our financial tasks.

There is simply no other way.

What you can do, though, is make this part of the process easier for yourself. How? It’s easy - pick just one thing to deal with at a time.

That’s right.

Just one.

From there, it’s a matter of combatting distractions and other things vying for your attention.

For this, I recommend borrowing a tip from sports psychology.

There’s a phenomenon known as 'quiet eye', which is where an athlete’s eye movements slow down and focus only on what’s in front of them. Researchers have found that ‘quiet eye’ can facilitate the ‘flow state’, where our brain activity is reduced except for the task that we’re focusing on. 

Here’s how tennis superstar Serena Williams explains it: “If you are behind in a game, it’s so important to relax, and that’s what I do – when I’m behind in a game, that’s when I become most relaxed…Just focus on one point at a time… just that sole point, and then the next one, and the next one.”

This principle can easily be applied to managing your finances.

Pick one task and set aside five to fifteen minutes. Tell yourself that you’re making a commitment to finishing it and focus on nothing else except the task.

Trust me, if you just start with these five steps, you’ll be on your way to calling yourself a financial Shakespeare in no time!

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Financial freedom is closer than you think. My course, Fearless Finance, has everything you need to help you develop lifelong financial literacy. Click here for more info!