If there is one thing people have learned during the years of crisis and economic hardship for most families is that in today’s world it is more necessary than ever to have a good financial education. And for that you have to be clear about certain concepts and carry out practices that will help you weather the storm when it comes.

Financial education requires one to have a better understanding of financial products and have the precise skills, learn to make informed decisions and develop habits of saving and planning expenses.

The keys to financial education can be summarized in following ten points.

Financial Education in 10 Steps

(1) Be clear about your goals and set a strategy to achieve them: This will allow you to plan the time you will need and how you will use your money. If you have an objective beforehand, such as paying for a vacation trip, you will be more motivated to save.

(2) Know the risks: When you decide to put your money either in a fund or in the stock market, you should know the risks or if there is small print that you are not told.

(3) Be aware of your income and live by it: We all want to live without looking at the current account and give ourselves a lot of whims, but unfortunately this is not possible. You should not live beyond your means or else you’ll end up with debts that can’t be repaid.

Check out: How to overcome debt

(4) Learn how to make budget and comply with them: In relation to the previous point and once you are aware of the money, you should sit down and study the best way to use it to get the most out of it.

(5) Identify the types of income and expenses: When drawing up your budget, take into account what you receive and what you pay regularly, and also if you receive an extra pay or the tax office returns money from the tax return. Similarly, do not overlook if on certain dates you have a payment that you do not usually make every month, such as a higher gas bill in the cold months.

(6) Get to know the tax system and possible aid: Perhaps there are expenses that you can deduct when making the income tax return, such as what you have paid for school fees. There are also grants or discounts for family types, financial situation, etc. that you can benefit from.

(7) Know the terms used in personal finance: Help yourself with specialized books or blog to make a first approximation that allows you to distinguish a credit from a loan, know what is the fixed income or what is the meaning of the word deposit being used.

(8) Put your money to work for you: If you intend to save a certain amount each month, use that money to put it in a separate account with a financial institution in which you receive an interest.

(9) Before you invest, cross-check: If you have money that you don’t plan to use in the short term and you want to invest it, don’t do it crazy or in the first thing they offer you. Calculate the pros and cons. If you don’t see yourself as being very skilled in the matter, it’s best to go to a specialist for advice.

(10) Prepare for your retirement: You may be young and retirement may seem like something that will never come, but sooner or later it will and it will be more pleasant, if it arrives with sufficient amount of money. It is better to save little for a long time than in the last few years before retiring.

Author Bio:

Hi, I am Nikesh Mehta owner and writer of this site.

I’m an analytics professional and also love writing on finance and related industry. I’ve done online course in Financial Markets and Investment Strategy from Indian School of Business.

I can be reached at nikeshmehta@allonmoney.com. You may also visit my LinkedIn profile.