Financial Wisdom and How to Achieve It

Are you interested in achieving financial wisdom? What is financial wisdom, anyway? Wisdom is defined as the quality of having experience, knowledge, and good judgment; the quality of being wise. Therefore, financial wisdom is the quality of having experience, knowledge and good judgment when it pertains to your finances or your financial situation; the quality of being financially wise.

[Read: Raise Frugal Kids with Financial Prowess]

If you look on any media platform, whether it is the internet, a magazine or a newspaper, you will most likely see tactical tips that will inform you of how to increase your savings rate or earn a little bit of extra money on the side. Although these tactics are important, it is just as important to really understand the bottom line when it comes to financial wisdom and money management. Having financial wisdom is not simply making your home more energy efficient, unplugging electrical components that are not being used or clipping coupons before you buy groceries. It also includes understanding the fundamentals of what it means to have a healthy relationship with your money. Having a healthy relationship with your money is a key factor in achieving financial success and independence.

Would you like more information about how to gain more financial wisdom?  Suze Orman is a top financial expert who offers a few more tips in this article. Also, the following paragraphs include some of the best ways that will help you achieve your goal of attaining more financial wisdom:

The Amount You Make is Not as Important as the Amount You Save

Okay, this bit of wisdom is not entirely true. If you are looking from one end of the spectrum, there may be a person who earns a million dollars per year, who then spends a million and one dollars per year.  By being this financially irresponsible, he is really setting himself up for failure. Obviously, he will end up falling into debt, which will force him to live from paycheck to paycheck. This type of a lifestyle will only come with additional financial stress.

Now, if you are looking from the opposite side of the spectrum, a person who earns less-than-minimum-wage will already have a significant amount of financial stress whether he is consistently frugal or not. In order to achieve financial wisdom, it is imperative that proper financial management is followed. Proper financial management requires us to save about 20 percent of all of our earnings, if not more. If this saving habit is not developed, then the amount that you earn does not matter. The practice of overspending will leave you in debt. However, it is important to pay close attention to the amount you earn and also to discover new ways that will increase your earnings. It is not possible to out-frugal a low income. So, needless to say…

Saving Your Money Will Not Lead to Wealth

Let us take a glance into another section of the spectrum.  It is silly that we focus so much of our attention on pinching pennies instead of trying to explore new ways to earn a higher amount of money. Never eating out, clipping coupons, and making your own dish soap cannot lead to wealth or financial independence on their own. In order to achieve these things, you will have to increase your income and invest your savings. Doing these things is a great way to earn financial wisdom and financial independence.

Money May Not be Able to Buy Happiness, but it Can Buy Health

Often, people use the old saying, “Money cannot buy happiness,” which, again, is not completely true. It has never been the money itself that makes a person happy, but rather it is the lack of money that can contribute to feelings of unhappiness. Lack of money can also place added stress and anxiety to your daily life. It is also important to note that a lack of money can be bad for your health in many different ways such as:

• You may be unable to obtain adequate nutrition.
• You may have the inability to pay for a visit to the doctor’s office.
• You may be unable to purchase the prescription medication that you need.
• You may be unable to pay for other forms of medical care.
• You may be forced to live in an area that has a high crime rate.

So, it’s apparent that money cannot buy you happiness, which you most likely already know if you have any amount of financial wisdom. Having money and being financially secure means that you can purchase the things that you need to be safe, healthy, and happy. Also, it’s wonderful to know that you’re able to take care of yourself. Don’t you believe that that is worth something?

For additional information about financial success, see this YouTube video: