A lot of people come to the MoneyReadyApp and this blog, expecting to be told what to do with their finances.
Now if you are reading this blog, it's probable you read a lot of other ones. You may even have read my eBook.
Personal Finance articles, books, blogs, and forums are addictive. You cannot read just one. They should come with a warning label.
Why are they so addictive?
- Because as with anything, the more you learn about something, the more you get interested in the topic and the more you want to learn.
- Also there is the hunt for better strategies, recent tips. That sneaky feeling maybe you're missing out on an opportunity to do better financially.
- There can also be that curiosity factor, wanting to compare yourself to others. The major newspapers have "financial facelift" articles for that reason. Some bloggers give you their own personal financial situation in detail.
- That curiosity and need to measure ourselves explains much of the success of financial click-bait, which is just plain financial pornography. That just leads to emptiness and confusion at best, and falling victim to fraudulent predators at worst.
- But blogs can also lead to a feeling of community, of belonging. The financial forums certainly had that. These have been mostly replaced with comments on the blogs themselves or on social media. The articles are interactive, you are not alone, people will help you with your questions, and you can help others with your knowledge.
Often the information is free to you, and we all love free. Most (not all) blogs are monetized now. They are paid for by advertisers, and sponsored content. Increasingly they are not just side-gigs. Some people are leaving their jobs to blog full-time, so it must be lucrative, right?
In fact, I get many emails offering to write blog posts for me. That might explain why a lot of blogs sound alike.
But don't get me wrong, there is great stuff out there on the internet, but there is also so much noise. Think critically to save time.
Read, learn and even teach. The more you have done that, the better you are able to differentiate the bad press from the good, the advertisement from the information, the agendas from the teachings, the fake/misleading headlines from quality content, the canned advice from the researched. It takes time to learn, and time is money. So spend it wisely.
Now the truly time-saving version is this:
- Make some money.
- Spend some on what you need.
- Save some for what you will need in the future.
- Invest it wisely.
In just one word: plan.
I'm sure you know that already. What you're asking is 'but how?'
There is also a step 0. If you are a complete newbie to personal finance, the first thing to learn is not how to budget (step 2), or the fine differences between a TFSA and an RRSP (that's step 4).
It's to learn about yourself, and your relationship to money.
What do you want from money?
What do you think you'll want from it next year, in 5, 10, 20, 30 and more years? Look at what enriches all aspects of your life, not just your wallet, now and into the future.
Having a firm grasp on step 0 will allow you to be rational and focused on your goals. It will guide you to find and learn the 'how' for steps 1-4 that work for you.
It will help to avoid you being misled and making mistakes.
People change and learn, circumstances change: revisit step 0 as often as needed. It's not just for newbies.
At some point, you need to apply what you have learned.
I don't tell people what to do with their money. My instructions are for you to think and learn about what to do with your money.
The MoneyReadyApp will show you the consequences of your own decisions given your circumstances and expectations. It is agnostic to how you do steps 1-4.
This means that whether you are a complete novice or a financial planning expert, we treat you the same.
It is a sandbox, a playground with all the toys you need to apply your knowledge and test out strategies. It allows learning by doing. The best kind of learning, the one that sticks, the one that empowers.