You should Learn these 7 Money-Making Skills this Year
Being at home and doing nothing seems like every 9 to 5 workers dream. I guess that’s why the weekend is so loved. But what we’re faced with in these times has surpassed a two day weekend break. It’s a lockdown.
Many have been home for weeks, some as much as two months. Others who are mandated to go to work, such as the health and central service workers are few in number and ratio to those who are mandated to stay on.
This may seem saddening, especially for those who have to be able to make money.
Think of barbers, trainers, and just about all other customer service positions. People in this category have somewhat high their means of livelihood, paused, and in many cases is lockdown has caused their financial situations to become quite dire.
Luckily, this time at home does not have to come down to doing nothing at all, because being isolated at home is a perfect opportunity for you to learn many new things you wouldn’t have had a chance to learn amidst your normal routine.
So what are those things?
I am talking about learning Money skills.
In this article, I will share with you seven money skills you must learn during locked down.
In summary, you will learn the following in this article:
- Why it’s important to learn money skills?
What are the 7 money-making skills?
- Learn Budgeting
- Unlearning Retail Therapy
- Learn to Save
- Strategically Invest
- Debt Management
- People Skills
- Take account of your spending
So why is it important for you to have good money skills?
Becoming Financially Free
First, it helps you become financially free. Being financially free is just about everybody’s dream.
However, it does take effort and planning to ensure this dream becomes a reality. For those who don’t know what it means to be financially free. Let me explain. More specifically, a financially free person is one whose assets exceed their liabilities and whose income is significantly higher than their expenses.
For example, if a person makes $1000 a month and as expenses of $600 a month, then that person is financially free. And the surest way to attain financial freedom is learning and mastering good money skills.
This money skills allow you to become and remain debt-free. Being in debt is something most income earners have experienced at one point or multiple points in their lives.
There’s nothing wrong with being in debt to a banker, or a private lender. What is wrong is the inability to pay the debt back.
Many people do not know that borrowing is a skill on its own and learning basic money skills will teach you how to borrow and get rid of your debt.
In due time, however, until you become debt-free, it is important to learn how to manage your loans. As I just said, there’s nothing wrong with being in debt to a bank or a private lender. The only thing wrong is the inability to pay back.
Unfortunately, many people have taken loans, which they simply cannot repay, and this game greatly impact their credit score.
For those who aren’t aware a credit score is a number by which your creditworthiness is measured. People whose credit history shows that they pay back their loans on time have high credit scores, whereas those who have a history of not paying back on time have low credit scores.
Keep in mind that people with high credit scores are eligible for higher loan amounts at lower interest rates.
For those with bad credit scores will find it hard to secure a loan. Even if they do the interest on it would be significant.
A person with good money skills will know exactly how to manage their loans in such a way that they would always pay back on time and increase your chances of securing better loans.
Only good money skills can open up your eyes to this.
Once you’re out of debt, you can then start to invest. Having good money skills will set you a path to becoming financially free. But you can’t get there. If you don’t invest or reinvest your time, money, and skills to set goals.
The word investment is usually the difference between a successful person and an unsuccessful person, where you put in will determine what you will be able to take out.
If you’re properly invested, then you’ll be properly rewarded. Keep in mind that it’s not all investments that pay off. Many have lost money on bad investments. However, a person with good money schools would be able to tell a good investment from a bad one.
A person with such skills will also be able to cultivate those investing senses that increase their chances of success.
One thing synonymous with good money skills is the ability to save. Earning money is one thing. But having money left over after your routine spending is another.
One of the most important reasons why should learn good money skills is that it teaches and improves your ability to save.
What is saving important money-making skills?
Well, a few days ago I found my jacket, which hadn’t worn in months. I found a decent amount of money in one of the pockets. Anytime I wear that jacket. I always keep money in that pocket. I felt like I had hit a mini jackpot. Since I have forgotten that I had money in there in the first place.
That experience taught me the importance of saving, even though I did that unconsciously. But, learning money skills will teach you to save consciously. It is a skill that you will never regret learning.
Next, there is called Financial forecasting.
Forecasting simply means predicting possible future outcomes in situations. In this case, I am talking about financial forecasting.
Having good money skills will sharpen your senses as far as forecasting is concerned. It will help you keep your eyes open for potential changes in prices and rates of various goods and services and this will guide your purchasing or investment decisions.
Next, is Discipline.
Then there is discipline, which is perhaps one of the greatest money skills of them all. Having money in your possession is a great feeling. You know how happy you get when it’s payday, right?
There is a certain temptation that lingers when you’ve got cash at your disposal.
You may be tempted to buy as many nice things as you can find. You would also want to eat at the nicest restaurants and buy a fresh pair of sneakers. Even though you don’t need another pair.
What I’m trying to say here is people find it hard to control themselves when they have purchasing power.
A lack of financial discipline is one of the major reasons why many people are broke or in debt.
Why would someone who earns a decent amount of money still find themselves being broke?
Financial discipline is the answer to that and learning good money skills will help you understand why you need to be financially disciplined.
Now that we’ve established why it is important to learn money skills. Let us now take a look at seven good money skills you must learn during locked down.
Money Skill # 1: Budgeting
Budgeting is one of the most important skills to learn. A budget is an amount of money or resources dedicated to a particular purpose during a set period of time. One of the most important money skill a person should learn during the lockdown is how to draw up a budget for daily or monthly expenses.
The lockdown period has really been an eye-opener. It has shown how much people neglected the budget for their daily expenses.
The isolation period has also forced them to learn it.
Especially those who are privileged to have extra cash to burn.
Keep in mind, it is not enough to just write down a budget. You must also stick to it.
Money Skill # 2: Unlearn Retail Therapy
Retail therapy is a term used to describe the need to purchase a product not because you need it, but because it makes you feel good or for the sake of how others see you.
Retail therapy has been the cause of so many people going broke or being trucked in debt. The lockdown is a great chance to unlearn retail therapy habits, especially since resources might become scarce along the line.
Cultivate the habit of buying only things you need not the things you want.
Money Skill # 3: Learn how to Save
Budgeting is a great money skill to learn and so is saving. Money saved today can bail you out of uncomfortable situations in the future, especially when you may not be able to access a loan at the time of need.
The trick to saving is simple. Don’t spend all of your earnings.
- A percentage of your income should be budgeted for daily expenses for a time period.
- Another percentage could be dedicated to investments.
- A certain percentage has to be saved.
It doesn’t have to be much, as little as 10% of your income saved over a period of time would result in a more substantial amount. So during this lockdown, ensure you practice saving.
Money Skill # 4: Strategically Invest
For you to grow, from where you are today, to where you want to be in the future. You need to invest not just money, but most importantly time in learning new skills and strategies.
Being able to predict possible market outcomes, and investing in those areas is a skill you should learn.
Like I said, before. Money isn’t the only thing you can invest.
You can also invest your time in learning new skills, which will earn you more money.
Money Skill # 5: Debt Management
Skill number five is Debt management. A lot of people are awful when it comes to planning their loans or payments. Late loan payments or defaults can cause unnecessary inconvenience is in the future.
Such inconveniences include paying higher interest rates or even forfeiting your property.
All this could be avoided. If you learn how to service your loans, diligently.
You should dedicate a percentage of your money to debt servicing, calculate the amount owed, and work out how much you will need to save every week or month to make up your repayment amount.
This would be easier if you’re repaying your loan in installments.
Money Skill # 6: Learn People Skills
Money skill number six learned people skills. You may be wondering why I listed people skills is a money skill that you need to learn.
Well, it’s simple, the only living beings in this world you could ever make money from our people. What would Facebook be without people? What would Amazon be without people?
You get it?
People have money, dogs and cats don’t and for this reason, learning people skills is important in your quest to make money.
- Learn how to be approachable.
- Learn how to address people
- Learn the importance of remembering people’s names.
- Ask yourself what kind of value you can add to people’s lives?
- Look them in the eye when they speak to you
- Understand what they want.
How can you practice people skills? You can get tips online, you can study human trends, and, of course, you can practice with yourself in the mirror.
Money Skill # 7: Take account of Your Spending
Do you know how you can do that? Well, at the end of each month, your bank gives you your transaction statements showing influence outflow. Good. You should do that for yourself on a daily basis.
Take account of the amount of money spent each day and what you spent them on. This will help you know if you’re spending money on the right or wrong things and we’ll help you plan for better spending.
Ultimately, this time we are in 2020 can be used in two ways.
- To set you back
- To propel you forward
Don’t let this time go to waste. Use this time to learn some or all of the money skills I just mentioned above.
Soon when the pandemic is over, you will have a new set of skills to help grow your wealth.
I hope this information helps you. Please share it with your family, friends, and social media.