- What knowing our finances means
- Why most of us don't know or understand our financial situation
- What understanding our finances does for us
- How to start knowing and understanding our finances
- Quote of the lesson from Charles Kettering
How well do you know your finances?
Even better, do you understand your finances?
Most of us don’t know our finances, and even less of us understand our finances.
What’s the difference you might ask, well it turns out there is a big difference and on today’s show we’ll discuss what both are and why they important to winning with money.
Knowing our finances means we are aware or are informed about our money. This means we know things such as
Understanding our finances means we are comprehending our decisions on money and are aware of how these decisions impacts us. Things we can do to understand our finances better include:
- Knowing what our net worth is
- Create and stick to a monthly spending plan/budget
- Have short term and long term goals
- Making short term sacrifices to achieve long term goals
Understanding our finances allows us to look at the big picture when making financial decisions instead of having the mindset of week to week or paycheck to paycheck. This lets us make wise financial decisions, frees us to become more creative and take “risks”, lets us determine what we need to do to life the lifestyle we choose to, and ultimately allows allow us to make our financial dreams a reality.
In short it allows us to take on short term pleasure for long term treasure.
Today's quote of the lesson is brought to you by Audible.com
“Knowing is not understanding. There is a great difference between knowing and understanding: you can know a lot about something and not really understand it. ” ~Charles Kettering
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