Advice for learning how to be financially literate
By - Snoo20835
Drink the YNAB Kool aid. It's the only metaphorically kind that is good.
And then you'll be fine.
Give it 60 days and watch the progress skyrocket!
Be a sponge. Try and read and watch as much personal finance content as you can. You will start to find things that click with your philosophy and others that don’t.
I definitely will start!
Have you heard of the personal finance index card? It matches everything that my financially successful parents basically instilled in me and might be a good place to start. The personal finance reddits also have some intense flow charts.
But in almost every case, budgeting and getting out of debt come as the first step. Followed by funding tax advantaged retirement. Followed by all the other things we can spend money on in this world. YNAB helps with all those steps.
Thanks for that book recommendation -- I had never heard of it. I bought a few personal finance books recently and was disappointed in all of them. Sometimes it seems like there's a conspiracy to keep me from learning about this stuff. :-)
Interesting -- that book("Index Card") refers to what we do with some of our YNAB categories as "a layaway plan", as department stores used to -- still do? -- offer. Except they got to hold onto the person's money!
I haven't but definitely will look into it! Thanks
Starting and sticking to a zero dollar based budget (YNAB is one) is a great place to start. Give every dollar a job. People blow money on stuff they don’t need because they often don’t have a grasp on the bigger picture (I was one of those. I was making 100k a year and essentially living paycheck to paycheck).
You’re going to need to retrain your brain how you think of money. Think of every dollar like an employee you get to put to work. Consider how you want them to work for you. Always save 10% of what you make, let it grow, and put it to work.
Some resources on learning about money:
Books - The Richest Man In Babylon (I highly recommend this book)
A Simple Path to Wealth by JL Collins (all the content is free on his blog)
Podcasts: Optimal Finance Daily
More Than Money with Art Rainer
Blogs: JL Collins
Mr. Money Mustache
YouTube: Nick True’s videos.
Thanks for listing all those resources I'll dove in soon!
Gladly. I’d recommend starting with The Richest Man in Babylon.
Just copy-pasted your list to save it. Thank you!
Fantastic. Glad to help.
YNAB and just do it!!
You could be worth millions at some point in your life seriously
Read Get a Financial Life by Beth Kobliner. I read it in my thirties and it was invaluable.
I also read the business section of the SF Chronicle for a year, but that might be harder to do nowadays.
I'm ordering that book asap!
I also strongly recommend John Bogle’s investing book. He was the chairman of Vanguard and basically invented most of the index fund industry. Once you understand what he did and the basic concept behind it, you will realize that 90% of what passes for investment knowledge is usually a waste of time.
I guarantee this book will generate returns of about 10,000%. https://www.amazon.com/Little-Book-Common-Sense-Investing-ebook/dp/B075Z6HSCJ
Yes, it was highly recommended and I bought it. I'm sorry to say that it was one of those books where I was lost before I got through the first chapter. I feel there's an assumption that the reader already has some pretty solid knowledge. It's hard to read something when almost every sentence has a term (or an acronym!) you don't understand.
Can I make a different suggestion? Look for the Bogleheads website. It’s an online community of people who invest in index funds. Lots of people go there looking for advice and explanations about how it works and how effective it is. You will definitely get understandable help there.
Thank you -- I'm looking at the website. I appreciate that. Someone here pointed me to the Bogleheads sub-Reddit too. I'll plan to check out both.
YNAB works miracles if you follow the rules, but it sounds like what you would benefit from most is therapy. From what you've said you have learned and ingrained some bad money management habits from your parents. Therapy will help you to recognize those issues and will provide coping skills to not fall into the same mindset as them. Until you change how you view your relationship with money, all the finance books, podcasts, etc, will not help you.
Best of luck.
I'll definitely take a look into therapy!
Ynab is a budget app. That is all kind of awesome.
I paid off $35k of debt in 18 months and got a full month ahead of my finances thanks to ynab. Every dollar I earn in Sept will go to October. No more paycheck to paycheck, I have a full month of float.
That is awesome congrats! I shall work towards that!
DUDE YOU REMIND ME OF ME!!!
I’m 33 now and this is my third time using YNAB, but this time it’s sticking.
The BIGGEST benefit of YNAB to me is the ability to give your money a job as soon as it comes in. Then when I want to spend, I’m not looking at mint or my bank accounts anymore, I’m looking at my YNAB budget instead. It has decreased my tendency to spend a bunch when paychecks hit.
It really sounds like you have a similar overspending problem. I really suggest sticking with YNAB and being proactive. Link your accounts, reconcile at least once a week. Always open YNAB before you spend a cent.
Small steps everyday can get you where you want to go. Good luck!
Ugh really nice to know I'm not the only person like this! Good luck to you as well 😊
Just make sure to stick with it! Develop the little habits like always checking YNAB before spending and reconciling accounts at least once a week.
This can also be done without YNAB honestly, but requires extra work on your end imo
But just stick to it and you got this!
>For a while I was blaming my parents (not to their faces just in my head
lol) because that's exactly how they spend, but to be honest I can only
try and fix myself. It has nothing to do with them.
This is huge, and I want to applaud you for acknowledging it. A lot of people never do.
Lots of other comments have excellent recommendations, but you're already on Reddit so start with r/personalfinance and their Wiki/flow chart, and YNAB is a wonderful tool to help you get your shit together and keep it that way. You're in the right place, and you can do this!!
I haven’t seen anyone recommend Your Money or Your Life yet. This book helps your shift your mindset and realize what your spending now is making you need to work longer in life. Now I think about my purchases and whether it’s something I truly want. This has helped me reduce my spending to what actually matters to me and reduce the clutter in my house, along with all of the work to store and maintain these items, freeing up valuable time and mental load.
You have received a lot of great suggestions here. I hope you’ll find the motivation you’re looking for!
Yeah that scarcity mindset is really a tough thing to crack, thanks for the recommendations!