Financial personality Ramit Sethi is baffled when people say that they are "just not good with money." It's fine to admit if you aren't good at something, but viewing your current state as a condition rather than something you can fix puts you out of the driver's seat.
Sethi encourages people to correct their money habits instead of saying that they're just not good with money and calling it a day.
"It's a skill like anything else," Sethi explains.
By comparing money to any skill in life, Sethi offers a playbook for getting your finances right.
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You Can Learn How To Be Good At Money
Everyone has become good at things that they previously weren't good at. Some people become fast runners after many years of practice, or feel confident speaking on stage after creating many videos.
However, you don't have to do something spectacular to know how to develop skills. Sethi brings up a very basic skill – walking – as his example. None of us knew how to walk when we were born, but most people can now walk fine. Some people can walk longer distances than others, but we all learn that skill from nothing.
It takes consistent practice to learn how to walk. However, you have to know what makes for good practice. While the practice for walking is straightforward – put one foot in front of the other – practicing money is different.
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How To Practice Getting Good At Money
We all have an idea of what it looks like to master your money. Your income exceeds your expenses, and you can make regular investments in your portfolio. You have enough money to spend on some things that give you pleasure, such as travel, but you're not going deep into credit card debt.
You don't have to master every money habit on day one. It can start with monitoring your spending so you aren't buying anything impulsively. You can set up automatic investments in an ETF instead of trying to figure out how the stock market works. Your next step can involve creating a budget so you know your monthly income and expenses.
Once you do the small steps and practice them consistently, you'll put yourself in a better position to make big money moves that lead to a better future.
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Commit To The Long-Term Journey
Mastering your money will take time. You won't have a seven-figure portfolio and a six-figure income overnight. It will likely take many years to reach those goals, especially if you are starting off with debt.
If you want to master any skill in a meaningful way, you must commit to it for multiple years. It may be frustrating in the beginning as you make mistakes and feel overwhelmed as you consume new information. However, it gets easier over time.
When you're on the journey of getting your finances under control, think about your main motivation. Are you a parent who wants to set your children up with a bright future? Do you want to be the main provider for your family so your spouse doesn't have to work full-time? Do you want more freedom and the ability to start a business that gives you full control over your schedule?
Tying a strong motivation to making money can help you persevere when it gets difficult and commit to mastering your finances.
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