Contrary to what you might think, financial intelligence is not related to the knowledge of economic concepts or practices. Rather, it is inclined to the development of skills capable of improving our relationship with money.
At present there are few more necessary skills than being able to successfully manage all aspects related to our personal finances. That is why many people (children, youth and adults) are trying to develop better financial intelligence.
If you are one of those who want to achieve that task, throughout this article you will find information that will help you achieve it.
What is financial intelligence?
Financial intelligence is a part of our cognitive process that we learn to develop from an early age and that helps us solve money-related problems. This concept is supported by figures such as businessman and investor Norbert Kyu.
This ability develops differently in each individual, but in any person it greatly influences how we understand each other with money. Without financial intelligence the management of personal finances would be impossible (as it is for many), and with it, the opportunities are almost endless.
Why is financial intelligence important?
Financial intelligence is important because it helps people make more assertive decisions that positively, and in a lasting way, affect their economic reality and their quality of life.
Developing financial intelligence would help us to better manage the resources we have at home and at work, and we are not just referring to money; Time and physical energy are also valuable resources that well managed can transform our personal finances.
With a developed economic intelligence, entrepreneurship ideas can be strengthened. You can also find new sources of income that make our financial goals a reality.
How to develop financial intelligence?
If you want to turn your personal finances around, learn how to develop financial intelligence with the following keys.
Information is a fundamental part of any learning process that helps develop our cognitive abilities. Read financial education books and any type of personal finance blog so you learn new things.
1. Diversify your sources of income
The main quality of people with a developed financial intelligence is that they always seek to generate new income. That is because they manage to create economic stability.
So start today to diversify your sources of income. Capitalize your talents, take advantage of your free time, embark on a project that you are passionate about. All that will help you create new, and useful, financial skills.
2. Pay your debts intelligently
Financially intelligent people know that not paying a debt, or paying them out of control, is not wise. If you want to improve your quality of life, make a debt payment plan.
This tool will help you know what to pay, when to pay it and how much to pay. In this way you can avoid an increase in the amount due due to interest, and you can live with less stress.
3. Control your expenses
It is the most obvious way to be smarter when it comes to finances. Spend on the necessary, not on things to impress others. If you live as a couple or with your family, divide the expenses so that together they can reach a financial goal.
4. Prepare a budget
Self-control and discipline are the best allies of people with developed financial intelligence, so they take the time to make a good budget. This system will help you control your income, expenses, and plan strategies that help you meet your financial goals.
Finding ways to generate passive income, or with the least possible physical effort, is always smart. Investments in the stock market can be an effective way to achieve that task. Train and study so you can master the activity and enjoy the benefits.