Improving Your Financial Acumen
Acumen Definition: “The ability to make good judgments and quick decisions, typically in a particular domain.”
Let’s start this writing off with an exercise by answering a few questions below:
- Do you have the ability to make good judgments and exercise quick decisions when it comes to financial matters?
- That item that you’d like to buy – is it a wise purchase, bearing much fruit for years to come? Or is it a lost opportunity cost which might be better invested elsewhere?
- On a scale of 1-10 (1 being worst, 10 being best), how would you rate your financial acumen?
Acumen in any arena is tough to come by. When you consider yourself to have a relatively solid grasp in an area of expertise, it is because you have put in the hard work to gain the knowledge needed to become an expert. Much blood, sweat and tears have gone into learning what you have learned and the result is a feeling of proficiency.
The same principles hold true with financial discipline. One cannot just wake up one day and say to themselves, “I have financial acumen today.” Rather the journey towards financial acumen which leads to Financial Freedom begins with one admitting he/she is a novice and ready to learn. Being in a ‘sponge’ mindset, one is ready to soak up as much knowledge as possible.
How To Improve Your Financial Acumen
Here are some recommendations on how to improve and grow in your financial acumen:
- BE A SPONGE! – there is so much information out there on financial matters that it is astounding. Most of it is solid, some of it is subpar, and some of it is downright filth. Read it all, or at least what you can stomach. Become adept at sorting through what information Remember, “Knowledge is the beginning of wisdom.” You can always learn what to do and sometimes more importantly, what not to do.
- START SMALLER – It is easy to say, “starting today, I will completely turn my financial life around!” While this is a solid idea, it is very lofty and disorganized which can lead to frustration. Instead, start smaller: set a new habit to balance your checkbook one day a week or to buy groceries instead of eating out. Keep building on these small steps and eventually the progress will add up!
- BEGIN TODAY FROM WHERE YOU ARE – There is no better time than right here, right now, to begin on the path laid out before you. Though the task ahead may seem rather daunting, set aside a certain amount of time – whether that be 10 minutes, 50 minutes or 3 minutes – to grow and learn your financial skills. Work on that spreadsheet you have been tinkering with or read up on the book sitting on your top shelf to learn about a dividend investing strategy. Five minutes per day over the course of an entire year adds up to over 30 hours over the course of a year! Imagine if you were able to do 10 minutes, 30 minutes or more! You could learn so much with a minimal time investment.
- MAKE IT HABIT – A large part of achieving financial acumen comes in the ability to lead a disciplined financial lifestyle. One can have all the knowledge in the world but if you are not willing to sit down and budget or stop that impulsive purchase, not even the greatest financial knowledge will help you. As you are learning more and more about how to maintain a solid financial state, start to integrate what you are learning into your daily action through small changes in habit. As you build on the habits built before, soon you will be achieving a place of ‘the automatic’ where you will be on auto-pilot with the new, solid habits you are building up.
A famous quote that sums up this post perfectly: “A journey of a thousand miles begins with a single step.”
Remember, it is ‘brick-by-brick’ that one builds up any knowledge base – achieving financial acumen is no different. Commit yourself to mastering the basics, continue to learn and grow your skill set and see your financial acumen grow and grow!
Disclaimer: (1) All the information above is not a recommendation for or against any investment vehicle or money management strategy. It should not be construed as advice and each individual that invests needs to take up any decision with the utmost care and diligence. Please seek the advice of a competent business professional before making any financial decision.
(2) This website may contain affiliate links. My goal is to continue to provide you free content and to do so, I may market affiliates from time-to-time. I would appreciate you supporting the sponsors of MoneyByRamey.com as they keep me in business!