Readers and subscribers often ask questions about finances: how to plan a budget, whether to invest, whether a safety cushion is needed, how to increase one’s income, and others.
The Keys of Mastery project is not about how to improve financial literacy. Nevertheless, I have something to say on this topic.
In this article, we will touch on some questions about money and financial literacy. Also read why people become victims of financial fraud.
Time of chaos and change: how old programs and ruts work
For most people, money is truly a support, and all sorts of things happen in life.
We live in a time of chaos and change. It is impossible to have the stability that many have dreamed of since the Soviet Union era.
In those times, the path was completely laid out: finish school well to get into university for free; be guaranteed a job through placement, etc. And life was similarly mapped out.
This is a very straight line – all points are known in advance, no turbulence. The only task was to enter this rut well and adhere to its rules.
Those times are gone.
Now we live in an era of global change. One of the main skills that helps to navigate turbulent times is the ability to be flexible and adapt.
See also Why it is important to be flexible and how to learn it
Why it is important to improve financial literacy and plan a budget
Many people lack basic financial literacy and the ability to plan their budget.
For this reason, life’s force majeure events (such as an unplanned pregnancy) can easily throw you off track.
It is precisely for such unexpected cases that a financial safety cushion serves.
There are people who believe that caring about financial security is an expression of fears and inner uncertainty about a bright future, a form of self-hypnosis and tuning in for the worst.
The pandemic situation showed many the naivety and falseness of such reasoning, forcing them to think and reconsider their approach to managing financial affairs.
Any force majeure, big or small, can only become a blow when you do not have a special fund that you can dip into out of necessity and fill an unexpectedly formed gap from there.
You can build a safety cushion starting with tiny amounts – by setting aside a painless sum for you each month. From this same fund, you can also direct money toward important goals, such as a long-awaited vacation at the sea.
Life is unpredictable. The more you cling to stability, the faster life will knock it out from under you.
What is the essence of a safety cushion
When you create a safety cushion, do not get attached to it.
There are cases where a person saves money in a safety fund, some crisis occurs (someone gets sick, something breaks), and it becomes a pity to withdraw the money for unforeseen expenses.
Suddenly, Uncle Scrooge or Koschei, who pines over gold, awakens in the person.
The essence of a safety cushion is not to accumulate and never touch it. Its essence is that you can – without harm to yourself and without losing your usual quality of life – take from it when something happens to you.
So take and use it. But as long as there is no critical situation, you do not touch it.
See also How to Reach the Comfortable Money Level, or Levels of Money Mastery and Associated Emotions
Expanding Financial Consciousness
Your dreams expand you financially.
A specific dream requires money, and usually a larger amount than what you are accustomed to.
I had a dream. I love the sea, warm places, southern nature, but I dislike overcrowded beaches.
When the opportunity arose, we started traveling—searching for pristine, secluded spots and camping there in tents. I value solitude and the chance to recharge in nature.
Back then, I had no idea that the dream-idea of traveling in my own car to wild places, which once took root in me, would become something that would shape my path.
I long dreamed of such freedom of movement and the ability to choose where I wanted to stop. But at that time, I didn’t understand that this lifestyle required a completely different level of financial well-being.
Thus, the dream became what drove me to financial expansion. The dream guided me, and it unwittingly became a program that built my path to a new level of income.
Small ideas can expand you imperceptibly. For example, many people, thoroughly preparing for a trip, take everything they need with them.
Consider a new thought: if you forgot to bring something, you can easily buy it upon arrival.
One such new assumption can multiply your financial boundaries many times over.
Use every opportunity to expand yourself financially.
See also Why It’s Important to Dream Without Limits and Focus on What You Desire
Your financial literacy and security are your responsibility
Seek the necessary knowledge from financial experts. Do not hesitate to dig into the information you need. Any information is available now.
Life taught me. I am careless with money, do not remember prices, do not check receipts, and can forget what I bought in a store. Life taught me very simply.
I needed to make a refund of 10 thousand. I sent 100. There was money in the account, and suddenly it was gone. I had to learn to negotiate the return of the excess sent.
In the end, everything was resolved, but after this incident, I realized that I need to check everything (first of all, myself), count, and be more attentive to money in general.
After that, I became more interested in my budget, the state of income and expenses, and started looking at what was happening in bank statements.
This was a critical situation that showed me – “learn to count money”. Life taught me many things, and specifically through money.
Now there are many financial bloggers. Choose the one that suits your worldview.
There are many financial applications for budgeting. For example, keepcoin (from yandex), zenmoney.
Google “top ten popular budgeting apps”. Download a demo version – try out how understandable and comfortable the chosen application is for you.
In addition to improving financial literacy, learn about financial security.
When you become a victim of financial fraud
“Those who needed to be deceived are deceived”
Svetlana Dobrovolskaya
When you have been deceived (for example, you fell into a financial pyramid scheme or encountered fraud), wipe away your tears of disappointment and prescribe for yourself an algorithm of your further actions and decisions.
Behind falling into a financial pyramid scheme lies a thirst for easy and quick money.
Long ago, when I was a teacher, magazines came in that actively advertised various opportunities to win an apartment by buying a simple knife or other trivial items.
And I played along, I started with that. I chose the cheapest item and dreamed of getting an apartment with its help.
But why does a person dream so much? Their horizons are so narrowed that they cannot see opportunities to earn money.
There is a well-worn path that does not satisfy them financially, but, clinging to safety and stability, the person continues to sit in this swamp.
And when one day I heard on the radio from an economist that by the time I reached retirement age, there would be no pension left, I left my job and set out to try something new.
Yes, later I had to work myself to the bone, but I already knew why I was doing it.
The article is written based on a broadcast from the section #conversation_on_the_couch “Separate Budget. Who Is It Suitable For”