How to Take Control of Your Money (and Stop Feeling Clueless)

05/21/2015 06:00 pm ET | Updated May 21, 2016

If you're feeling clueless about your money, you're not alone. According to a recent 2015 Financial Literacy Survey released by the National Foundation for Credit Counseling (NFCC) and NerdWallet, a whopping 41% of American consumers gave themselves a grade of C or below when it comes to their own personal financial knowledge. Even those who scored themselves higher aren't fully confident. A full 75% of respondents say they would benefit from professional advice and 70% admit they're worried about their current financial situation.


These results aren't surprising when you consider how few opportunities we have to learn about money. Money principles aren't taught in most schools and there aren't many other places to learn. Unless your parents were very focused on teaching you the mechanics of money mastery - and you chose to listen to them - chances are there's a lot you don't understand about your cash flow.

For an adult, money comprehension is a critical skill for life success. If you don't know how to budget, save, or invest your capital, you're setting yourself up for a life filled with disappointments, insecurity, and feelings of powerlessness. No one wants to feel this way and the good news is that you don't have to. All it takes is a little time and initiative to learn about how to manage your money so you can level the playing field with the financially educated.

Here are the first things to figure out when you want to get a clue about your money:

Find out where your money is going.

If you've ever walked out of Target or Trader Joe's with a receipt much larger than you expected (and who hasn't?) then you know how easy it is to unintentionally overspend. We do it when we're out with friends, on family vacation, and even when bargain hunting online. Before you can learn to control your finances, you need to know where you're spending it. I like sites like that make it easy for you to track and categorize spending.

Stop paying for things that aren't important to you.
An amazing thing happens when you start looking at how your money is actually spent. $10 for lunch of Tuesday doesn't seem like such a huge deal. When the big picture data shows you're averaging $200 for the month, though, it's easy to realize the trade-offs you're mindlessly making. Once you're familiar with your financial patterns, you can clearly see where you're spending money on things that you don't truly care about.

Start paying off your debts.
When you reduce spending on unnecessary purchases, you free up extra cash to pay off those pesky debts. Over time, as you reduce the amount you owe, you'll get to keep more of your paycheck each month. As you reduce your loan burden, you'll be amazed by the sense of power and control you start to feel over your life.

Start saving and investing.

The less you owe, the more you'll have to save and invest for your future. As your nest egg grows, you'll be better able to direct your life and take control of where you ultimately want to end up. In our society, money is the key we need to unlock many of our life goals. Want to launch a new business? Put your child through private school? Cruise around the world? Whatever your life goal, saving is an important first step to getting there.

Ready to stop being clueless and go to the head of the financial literacy class? It all starts with a belief in yourself and the desire get educated about money. Just like anything in life you need to fail to really learn - so get out there and try, mess up, and try again. That's what learning about money is all about!

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