Your Financial IQ: Are You in Good Financial Standing?
Thu, 09/18/2014 - 11:06am | by Karleia Steiner
If you are proud about your high intellect, you may want to know whether your inquisitive brain has developed a good strategy that has increased your financial IQ. While the idea of an Intelligence quotient about finances is novel, the fact remains that you need to have a sound financial foundation under your feet if you want to get ahead in life. Failing to do so is preparing for a life of financial turmoil. Here are several ways to take inventory of your financial health.
A Savings Account Indicates a Good Financial IQ
If you have money in the bank, you already have a foundation on which to rely in case of a financial emergency. Cultivate the art of saving money to amass a small fortune by the time you retire. Even if you do not receive any additional interest or dividends on your savings, you will, at the very least, have managed to save money for difficult times that may occur in your future.
Credit Card Debt is a Sure Sign of a Deficient Financial IQ
If you owe money on several credit cards without having the needed funds to pay your debts, your financial IQ is on the lower end of the scale. Debt-free living involves a lifestyle that is unencumbered by having to pay back large amounts of monies owed to creditors. The bottom line is you need to learn how to take control of your financial situation. When you are back at the helm, you can then begin working on increasing your financial IQ.
Keeping a Household Budget that Makes Sense
Besides the fact that maintaining a budget will keep you above financial difficulties during hard times, your financial IQ is stronger when you manage your cash flow and expenses. Keeping your finances in balance leads to living a more harmonious and clutter-free lifestyle. Although it takes a certain amount of discipline to keep track of your finances, mastery of a simple budget enables you to surmount complex financial problems.
Get Rid Of Items and Services You Do Not Really Need
If you are similar to most people, you probably pay for many items and services you do not really need. From buying and smoking cigarettes to paying for overly priced cable television services, you can figure out how to achieve a better financial balance when you decide to give up certain things and services. The goal here is to focus on needs and not wants. Once you secure your financial footing, you can make the occasional expenditure on so called “luxury” items.
Making financial decisions that empower you to gain control of your monetary affairs is an important aspect of your life. While money isn't necessarily the foundation for a happy life, it provides security and affords freedom and flexibility that aren't simply available when your financial affairs aren't in order. Develop the ability to save money for a rainy day, and stay out of debt, if you want to achieve a high financial IQ.
Karleia is a freelance blogger.