When it comes to managing money, most of us think we know more than we actually do. We tend to have an exaggerated picture of our financial literacy and money management skills. And we tend to downplay the need for us to improve our financial intelligence.
The above explains why most business owners focus on other aspects of their business while neglecting the task of carefully tracking their personal and business finances. And in the end, their businesses usually pay the price. There are two common ways business owners fall into this trap:
- They neglect to track their income and expenses by allowing receipts to pile up (or get lost) and failing to enter then into a bookkeeping system.
- They do a decent job of updating their income and expense records, but fail to use the numbers to ask necessary questions about their personal financial situation and their business’s financial situation.
Your ability to ask these questions, provide answers to them, and make tactical changes when necessary determines your financial IQ level.
If you are poor at personal and business financial management, especially in the aspect that has to do with numbers, you may have a low financial IQ. But you are not alone. There are many other individuals like you out there who have very poor financial management skills. They regard financial management with anxiety, fear, or some combination of the above. They present the excuse that they are too busy with their business to track their income and expenses or analyzing figures.
Because financial education is so important, we seek to educate you (in some of our posts) about how to manage your money. Here are four proven tips for increasing your financial IQ significantly:
5 Guaranteed Ways to Improve Your Financial IQ by 57%
1. Read books and magazines-: Whether you favor traditionally bound books or e-books, reading books and magazines is a great way to increase your financial IQ. As with any other topic, there are many books on financial literacy and management. These include “Increase Your Financial IQ”, “Total Money Makeover”, and “The Intelligent Investor”. These books can teach you everything from managing your personal and business expenses through getting out of debt quickly, and to picking and implementing winning investment strategies.
For a couple of dollars you can buy a book or magazine and learn practical tips or strategies for improving your financial IQ and benefit you for the rest of your life. So, visit your local bookstore or visit online bookstores like Amazon and Barnes & Noble to buy your copy of these books.
2. Attend seminars-: Every year, tons of financial seminars are staged that offer a range of helpful hints on how to increase your financial IQ. You can find these seminars at your local bank or trade union or at arenas and centers used for holding seminars. These seminars usually feature experts in personal and business finance management who speak to you in person about everyday financial problems and their solutions. However, many of these seminars cost a fee to attend, but the value of the information you will gain from them will be well worth the price.
3. Read blogs-: If you are not comfortable with the idea of parting with some cash to buy a book or learn at a seminar, you can learn about personal and business financial management for free.
You will get loads of helpful information that will help you increase your financial literacy on sites like FreeMoneyFinance.com, MoneyNing.com, WiseBread.com, Moneycrashers.com and so on. I may be somewhat biased, but this very blog (MyTopBusinessIdeas.com) is also a very good place to learn a lot about financial management.
4. Use smartphone applications-: This might seem somewhat unreasonable, but your smartphone can help you increase your financial IQ. Many smartphone apps are now available that teach personal and business financial management skills. Examples of such apps include Mint.com, Shopping List, and Save Benjis, all of which will help you create a budget and save money on purchases. Some apps can even handle simple budgeting and accounting tasks.
5. Watch television shows-: Although television shows alone will not teach you how to increase your financial intelligence, they can be valuable learning tools. These shows feature money management experts that can teach you how to become a better manager of your own personal and business finances. They also tell stories of other people’s experiences, and you can learn a lot from these stories.
Now, mere learning from all the avenues explained will not increase your financial IQ. What will really help you achieve that goal is to implement all that you learn. By practically implementing the expert tips you learn in books, at seminars, from TV shows, and on blogs, you will become more financially literate within a short period. Note also, that there is no limit to financial intelligence. So, never stop learning new ways to boost yours.
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