Back to School & Constant Schooling

As the back-to-school season rolls around, many of us are reminded of the importance of education. It's a time for new beginnings, fresh starts, and learning new things. For children, it's about getting back into the classroom, but for adults, this time of year can be a powerful reminder of the importance of continuous learning—especially when it comes to personal finance. Just as students go back to school each year to learn new skills and knowledge, consumers should adopt a mindset of lifelong learning and consider "going back to school" in a different sense—by committing to continuous learning.

Budgeting : The Basic Math Of Life

In school, as a student learn basic math skills to understand numbers, addition, subtraction, and multiplication. Budgeting in personal finance is akin to these elementary skills. It involves knowing how much money comes in net annually, what your expenses are, and aiming that your outflows don’t exceed your inflows. A budget is your financial foundation, much like basic arithmetic is the foundation of all math. Ask all my clients and they will tell you that this is exercise is one of the first exercise we do before moving on to the other advance areas. (Might I add the way we do it does not feel like pulling teeth at a dentist)

Saving: Homework for the Future

You must remember having homework, and was there ever a time the dog ate your homework? Or was that just me? In the same way students are given homework to reinforce what they’ve learned, saving money is the homework that reinforces financial discipline. Saving is about setting aside a portion of your income regularly for future needs or emergencies. It's a practice that requires discipline, just like completing homework assignments on time. Regular saving builds a habit and prepares you for future financial needs. And remember that first lesson about the annual budget, well that is where we determine if the capacity to save exists. There are some stages in life when saving must be delayed especially when families are knee deep with daycare costs, large mortgages, until they get breathing room and will do aggressive savings to play catch up.

Investing: Advanced Classes

After mastering basic financial skills, like budgeting and saving, investing represents the advanced classes in personal finance. It’s about growing your saved money and understanding the risks and rewards. Much like advanced subjects require more in-depth study and critical thinking, investing demands an understanding of markets, risk tolerance, and long-term planning. Continuous learning in investing involves staying informed about market trends, new investment products, and economic shifts.

Credit Management: Social Studies of Finance

Managing credit is like understanding the social dynamics in school. It’s about building relationships—this time with financial institutions. Good credit management involves understanding how credit works, knowing your credit score, and maintaining a good credit history. Just as students learn about social behavior and history to better navigate the world, consumers must learn about credit to navigate financial systems effectively.

Retirement Planning: The Graduation Plan

Retirement planning is the ultimate graduation plan in personal finance. Just as students look forward to graduating and moving on to the next stage of their lives, individuals look forward to retirement as a time of financial freedom. Planning for retirement involves understanding retirement accounts, contributions, withdrawals, and tax implications. Continuous learning in this area ensures you are prepared for a comfortable and secure retirement.

How to Keep your Financial Education Going

???????????? Online Courses: Numerous online platforms offer courses on personal finance topics, ranging from basic budgeting to advanced investment strategies.

???????????? Books and Blogs: Reading financial books and blogs can provide insights and keep you up-to-date on the latest trends and tips.

???????????? Podcasts and Webinars: These are convenient ways to learn on the go. Many financial experts share their knowledge through podcasts and webinars. You do remember I have been hosting webinars for over four (4) years which serves as a resource for clients and the community at large. If you have learnt from one of my webinars then remember to share the wealth and pass on the link here to others.

???????????? Financial Advisors: Working with a financial advisor can provide personalized education and guidance, helping you make informed decisions. It starts with a brief 30 minute conversation about what you are trying to solve for so use the link to my calendar below to choose a time that works for you.

Conclusion: The School Bell Never Stops Ringing

While the back-to-school season may be a reminder for students to hit the books, it should also serve as a reminder for all of us to continue learning, especially when it comes to personal finance. Just as we want the best education for our children, we should strive to educate ourselves continuously. After all, the more we know, the better equipped we are to make sound financial decisions that can lead to a secure and prosperous future. So, grab your metaphorical backpack, sharpen your pencils (sorry, charge your ipads), and get ready to dive into the never-ending journey of financial learning. The lessons you learn today will pave the way for a brighter, more secure tomorrow.

Orlando Lopez,CFP,CIM,CIWM Book a Meeting Upcoming Events