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How to improve financial intelligence

How many times have we heard the story that when someone wins the lottery it will be probable that they will eventually lose all the money that they won.

This is merely sure because some people are just not fully preparing themselves with financial literature.

Keep reading to learn more about how to improve financial intelligence.

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Table of Contents

What is financial intelligence?

Financial intelligence, or also financial literacy, is the set of skills and knowledge a person has about finances and how he applies it to his financial resources.

It is important that individuals develop their financial skills so that as an outcome they can improve as well their economical situation.

Financial intelligence is not a thing that is just learned by reading a book or a blog, this knowledge is principally acquired by applying to your own budget.

Managing money is a practical activity that can be learned as a kid, and can be further developed as one grows older, but since it is a topic that is left aside, there might be people who continue to struggle due to their poor financial decisions.

And in order to reduce such financial mistakes, individuals should keep educating themselves regarding such topic.

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What do I need to improve my financial intelligence?

Desiring to improve your financial literacy is the main and important starting point to develop your financial skills.

Probably, everyone wants to improve their finances, but when it is asked, “who are willing to put the work and effort on what is required?”, many might set a foot aside and keep living as they do.

Improving personal finances requires time, consistency, and discipline.

Time, because practicing financial intelligence is a combination of what you are learning, with the income that you are getting and how you are managing it.

Consistency, because you will keep needing money for the rest of your life. As simple as that. And as an athlete, if you stop practicing, you might find yourself out of shape. So you have to be constant with the activities that will help you to reach your goals. Small wins make big wins.l

And discipline, because if you go back to old financial patterns, it is probable that you might end up back where you started.

The combination of time, consistency and discipline will build up in your mind, and will prepare you to know what to do as you improve your income.

 

What activities can I do to improve my financial literacy?

So what should you do if you want to start to improve your financial intelligence? Well, reading is a good start.

Of course, there are different ways people apply to learn about different topics, and certainly reading is the easiest way to do so.

The information is already available online, and can be easily accesed for free. 

There are several courses and private institutions that offer personal finance courses, but honestly, at first it is not really required to spend and do all those things. For sure they help, but you can start easily watching Youtube videos about personal finances, or reading blogs, such as Dineromoney.net

Reading has been for centuries the easiest method to learn and absorb knowledge, but also as mentioned, finances are applied, therefore you have to put in practice what you read.

Budgeting is one method that can help you to develop your financial skills.

Start by setting up a list of your income streams and your expenses. This way you can easily visualize in paper or in Excel, how much are you expecting to earn and spend during a day, month and a year.

From there you can start deciding what can you do to have more income streams and also which expenses are not really neccesary. 

As a year passes and you had a record on your numbers, the next year will be an opportunity to keep improving your finances and compare it with last one. This way you will be optimizing yourself and will start thinking on what has worked, what not and what else you can start for a new income stream.

Patience is key, and also the financial intelligence requires time to be developed.

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