Everything builds up in our financial lives. If we are moving in the wrong direction financially, eventually we are going to “take the hit.” Years of bad financial decisions and no improvement on financial understanding will add up. Eventually, it will lead to one massive, financial, knock-out “hit.” It may come in bankruptcy, loss of relationships, a mental breakdown, or many other negative ways. It all simply becomes unbearable.
Savvy means workable knowledge. Getting financially “savvy” can help you to avoid this future “hit.” It will also give you the hope needed to continue after a financial “knock-out” has already come into your life.
You can read all the financial books you want. You can go to a multitude of financial seminars. However, knowledge is simply not enough. You must be willing to make a massive life changes to become financially savvy.
If you are currently working so much that you have no time to relax or study, you are going to need a massive life change. It is better to shut your entire financial life down than to continue in financial folly. You may need to surrender your house and everything you own. You may need to file for bankruptcy. You will still be better off in the end if you make the commitment to change financially and never go back to your old financial ways.
Many people are unwilling to change. They put financial education and financial savvy on the lowest part of their priority list. However, the same people work hard day in and day out to barely live paycheck to paycheck. They somehow believe that they must hang on to the possessions they are barely buying on installment through mortgage or car loans. If they lose these items, it would be he highest anguish and a clear sign of personal failure. This mindset is damaging and counterproductive.
This “monthly payment” perception of financial reality is false. You already do not own anything. Only financial bondage follows. The person with a 100 year old $75,000 house with two cars- all paid in full- this person is successful financially. The person with a $400,000 house and two new cars -all with heavy loans- this person is in bondage. If the paychecks stop, this second person instantly loses everything.
To become financially savvy, you need to adopt the opposite of a payment mentality. Your mentality needs to be based on acquisition: the acquisition of financial knowledge and wealth. Every month and every year should be measured by this question: has my wealth and my financial knowledge increased? Every year a financially savvy person has a higher net worth. Also, each year a financially savvy person has acquired more financial knowledge.
Dropping the “payment mentality” is the first step towards becoming financially savvy. First, it frees up time and takes away all illusions. What you own is what you own. If you want to acquire something else, you seek new financial knowledge to do it.
Secondly, dropping the payment mentality will help you focus on acquiring true wealth. If your total assets are not slowly increasing every year, you will know something is wrong. In such an event, you will make the appropriate changes. Essentially, you will no longer be satisfied to “spin your wheels” financially. Being financially savvy will be a number one goal and sometimes even a pretty enjoyable hobby! No longer will financial knowledge be dreaded. Financial savvy will become a natural and desirable part of your life.