How would you define or describe financial education? What would you say it encompasses?
I’ve been meditating on this over the last few weeks, and I came to the conclusion that financial education comes down to habits and action rather than fancy, complicated concepts and theory. It is like saying someone is polite; we don’t mean they know a lot about how to act and react, we mean they actually act and react according to a parameter of knowledge, a code, or a standard.
Much like martial arts, where acrobatic movements look great in exhibitions, but are usually impractical for real combat, complex charts and fancy terms are great for the big leagues, but truly efficient defense and attack lie in the basic, often unglamorous, exercises repeated on a daily basis.
Saving might sound too simple to be million-dollar advice, yet, can you actually do it consistently? Are you really capable of protecting the money you save? What do you save it for? Your next vacation? Or do you intend to multiply that money? Do you know how to do so? Do you know how much value your savings lose to annual inflation?
Saving is not just keeping a fraction of your earnings, it is the beginning of a financially strategic mindset. And, by the way, did you know that your earnings are not the same as your income?
The essentials of financial education are hidden in those often-underestimated actions that we falsely believe we can start or stop doing whenever we want, much like an addiction. Yet, the very existence of financial therapists proves that healing your relationship with money might be harder than it looks. So it is better to think twice and start putting real action into the basics, rather than buying into overpriced hype.
What are your thoughts on this? Keep the conversation going at hola@abrahamalba.com . I’d really love to hear and learn from you.
Abe Alba
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