8 Small Habits That Will Build Your Money Know-How, According to an Expert
Written by
Crystal Mayer
Edited by
Zuri Anderson
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Experts agree that financial literacy is critical. Unfortunately, many people spend a lifetime not fully understanding the importance of saving, budgeting and staying out of debt.
As financial influencer Nischa explained on her YouTube channel, being educated about finance is not the same as financial literacy. She noted that the habits that made the biggest impact on her financial life were actually small ones that compounded over time.
Here are the eight tiny habits she shared to build money know-how.
Match Money with Priorities
The first habit to increase financial literacy, according to Nischa, was to match money with priorities.
She said she spent years spending money on things that didn’t really matter to her, including clothes she would never wear, expensive dinners and things she would rarely use. Instead, she noted that “Your money should reflect what you actually care about.”
To help her achieve this, she wrote down her top five priorities and calculated how much she spent on them. Then she looked at where else she was spending her money, and found a “massive disconnect.”
The experts at Ramsey Solutions agree about the importance of prioritization. They noted that it’s important to prioritize what matters and then pour time and attention into those things. They encouraged readers to separate priorities into specific time periods, including daily, weekly and seasonal priorities.
Set a Regular Money Date
Next, the financial literacy expert suggested making a monthly money date. She recommended setting aside 30 minutes once a month to review finances.
During the date, she told viewers to review last month’s spending, check any progress made towards financial goals and then set one focus for the next month. She cautioned that the goal or focus should be small and achievable, such as saving an extra $200 or investing an additional 1% for the month.
Embrace Automation
The YouTuber encouraged her subscribers to embrace automation. She said to automate anything that is recurring, including fixed expenses and subscriptions. According to Rocket Money, automating finances can help to eliminate stress, improve finances and reach financial goals.
Start Small (but Early) When Investing
The fourth habit to build a stronger financial future was to invest small and early. Nischa explained that investing, even small amounts, is one of the “biggest drivers of long-term wealth.” She encouraged viewers to invest in low-cost index funds that track complete markets.
Implement One New Thing Daily
Nischa also recommended implementing one new thing that is learned from a podcast, video or other source daily. Whether it’s opening a new account with a better interest rate or using a new budgeting tool, making one improvement each day can lead to big changes. Too often, the influencer explained, people consume information to improve their financial literacy but fail to implement it.
Don’t Shy Away from Money Talks
Another habit to consider is not being afraid to talk about money. Nischa said she used to be very uncomfortable talking about money, whether it was with friends, family members or even her partner. She noted that the topic felt taboo and that an “unspoken rule” prevented her from having an open discussion.
According to Psychology Today, many Americans still feel that the topic of money is off limits. Unfortunately, avoiding the conversation can cause stress and conflict. Instead of hiding from money talk, engage and ask questions to those you trust, suggested Nischa.
Shift Your Mindset
Next, the financial expert recommended a mindset shift from instant gratification to long-term gratification. She noted that building wealth requires playing the long-game. It is about making choices now that will help in the future, according to the financial guru. She said she had to reframe the way she thought from seeing investments as a sacrifice to a gift to her future self.
Skill Spending
Finally, Nischa suggested viewers spend money on a skill. She explained that it shouldn’t be thought of as spending but rather investing. Every skill, she noted, has the potential to increase earning power and should be viewed in terms of cost versus return on investment.
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