Everybody knows, but how many people do?

When you don’t apply the knowledge you have, it’s as good as not knowing anything. You go to the mall to get some ingredients and food items. You went home and cooked for hours, but you never had the intention of eating now or ever. So, why did you cook? Does that sound a little confusing? That’s exactly how it is when you know so much about finances, but your finances don’t really reflect the wealth of your knowledge.

When you don’t practice what you know about managing money, budgeting, and saving, you risk sliding into financial instability. A little overspending here and there, ignoring budget limits, or making impulsive purchases. Gradually, these habits can accumulate significant debt, deplete your savings, and create a cycle of financial pressure that could make you uncomfortable.

However, most people who find it hard to apply their financial knowledge have tried in the past and it probably didn’t work for them or they became inconsistent. In this blog, we will look at how you can apply your financial knowledge and make it habitual.

What are the Financial Knowledge You Should Have?

Let’s assume you know little about financial management.

You don’t need a degree to have basic financial knowledge. Even a child knows you must work before you can earn. This child has seen his parents leave for work in the morning, and they come back in the evening. Money doesn’t fall from the sky, right? If the simple principle of earning is to work, there are also other solid principles that you need to know and apply.

When you work and collect your paycheck, you need to prioritise. Sustaining yourself is important, and sustaining your job is, likewise. Therefore, you need to take care of your basic needs like rent, your utility, transportation, food, and other important needs that aid your sustenance. 

The mistake some people make is that they prioritise, but it doesn’t cover the expected number of days. For example, if you go to work 12 times a month, your transportation should be proportionate. Prioriitising here means the money you set aside for transportation should cover 12 days and not 5 days. Apply this principle to every need you need to meet.

What we just mentioned is also known as budgeting. Another important principle is saving. Saving is also a basic need. We save because we are preparing for the future. Living for today alone is not the most intelligent thing to do; you need to prepare for tomorrow.

Why should you prepare for tomorrow?

First off, nothing is guaranteed. The way the world works, anything can happen. People lose their jobs, people get hospitalised, and people get scammed. Things can happen when we least expect them. However, we are not to live in constant fear of what could happen or not happen. There is a thin line between being pessimistic and being prepared for the worst. And in fact, it’s not just about preparing for the worst; it’s about having something on which to rely and keeping situations from getting out of hand.

When you have savings, you are preparing for the days when an emergency can occur, or it could be for a project you would like to carry out.

Rather than using a credit card to settle bills or borrowing from friends, your savings can come in handy.

There are still other financial skills you should have, like debt management, investing, etc. Let’s now look at how you can apply the knowledge you have acquired to your finances and make it work for you.

Tailored Approach

What works for A may not work for B. But in personal finance, there are principles; how you apply those principles is the real deal. For example, if you are told regular exercise can reduce hospital bills but you can’t afford a gym subscription,. Are there other ways you can achieve that result without going to the gym? Absolutely! You can try cycling; if you can’t, you can run every day; if you can’t, you can take long walks; and if you can’t, you can get workout videos on Youtube. There are so many ways to exercise without going to the gym. 

What this means is that there are many routes you can take, as long as they take you to your destination. So, you need to sit down, think long and hard, or even research how to make certain principles work for you, right where you are.

Patience Approach

Impatience in humans comes from a combination of psychological, biological, and environmental factors. Impatience is something many of us deal with, and it also comes from just how busy our lives are. We juggle work, family, and social lives, and there always seems to be a clock ticking somewhere. Every minute you’re waiting, you’re thinking about where you need to be next. The pressure to keep moving and achieve more can make us impatient. However, if you want to hack your finances, you need to give room to patience.

This is not just about waiting to see how things turn out; it’s about trying, failing, and trying all over again. You should not give up until you reach your goal. The reason is not far fetched; for starters, what works for you today may not work tomorrow. The reason is that things keep changing, the economy is not stable, there is inflation, and nothing is predictable. Hence, you can’t give up, and you need to be more adaptable. Let’s look at that in the next subheading.

Be Adabtable

There is that popular saying, “Plans can change, but purpose remains the same.” There are times you could experience things that could hinder you from achieving your goal, you will have to work your way around them. For example, if your income decreases or your expenses increase, there is something to do. You need to plan your finances according to the status of your finances. This is the reason why you need to review your finances from time to time. When you are adaptable, you will learn more and still find a way to put what you know into practice.

Bottom Line

The truth is, knowledge is power, but it has to be used. There are times you want to practice what you know, but there is this stubborn debt that refuses to go. You have done everything within your power and used every tip, yet to no avail. If this is you, or you know someone going through this, you can seek help. Speak with one of our debt experts at EmpireOne Credit. Your debt can be reduced by up to 80%, and interest will stop immediately. Call us at (416) 900-2324 to schedule a free consultation with us. Being debt-free feels good!