Getting Educated is Just the Start

We’ve all heard that “personal finance isn’t taught in school.” By and large, it’s not. (Although that’s starting to change.) The truth is, however, that if you’re interested in learning key personal finance concepts, there’s no shortage of books and articles from a variety of reputable sources.

But if it’s so easy to get good personal finance content, why do so many people lack the confidence to make good financial decisions? And why do so many make financial mistakes that experts routinely describe how to avoid?

Certainly, there are a litany of reasons. One’s own psychology, to consuming misinformation online, to never getting any information in the first place, can all contribute.

But even for the diligent individual who reads the articles and personal finance books, a lack of timely follow through is not uncommon.

My Mistakes

I know this because I made avoidable financial mistakes when I was younger. And even as I became more financially educated, I sometimes delayed taking important financial steps in a timely fashion.

For example, one year, I got spooked by some macro economic news. I sold a bunch of investments without any real concept of how hard it is to “time the market.” Additionally, as a 20-something, I had decades to ride out market ups and downs and shouldn’t have been so easily spooked. As it turns out, my investments – had I not sold them – would have gone up substantially. But by the time I bought back into the market, everything was more expensive.

In another instance, early in my career I failed to optimize my 401k contribution percentage. In this case, I actually knew what to do. But I procrastinated and stayed underinvested. My money sat in my checking account at a time when interest rates were practically nothing.

In both examples, I almost certainly lost thousands of dollars. 

The Trouble with Personal Finance Books

Here’s the thing: These days, I’m kind of a personal finance geek. I actually love personal finance books and have read more than I care to admit. But if personal finance books were supposed to prevent my younger self from making the mistakes mentioned above, they failed me.

In the first instance, as a 20-something I wasn’t interested in reading a 200+ page books on personal finance (although I will admit to listening to one) and I didn’t learn key investment lessons. In the second instance, I was more educated, but I still lacked a system of accountability to ensure I followed through. 

So, if money books didn’t help, what could have? 

A Money Action Plan

A money action plan is a basic roadmap for life’s financial moments. It could be specific and short term (e.g. what to do with your money when you get a new job), or broad and long-term (e.g. how to move from financial foundations to financial abundance). Whatever the case, a good money action plan should have the following features:

• Digestible in Bite-sized Chunks: Having easily accessible content in a series of short articles is a lot easier to get started with than a hefty personal finance book. 
• Broad but Customizable: Everyone should have a broad understanding of key personal finance concepts and action steps. But not every topic applies to every person. A money action plan should allow for some topics to be added or removed.
• Repeatable Topics: Some financial actions, like building an emergency fund for example, happen over a series of milestones. A money action plan should break those into separate tasks.
• Add Your Personal Notes: When you add your unique notes directly alongside an article, it reminds you of how the content applies to you and makes follow-through easier.
• Ability to Track Progress: Who doesn’t like to see a progress bar getting closer to 100%? Whether you’re working on a short or long-term money action plan, seeing a progress bar can remind you of how far you’ve come and motivate you to continue.

Here’s some not-so-shocking news: The MoneySwell Financial Priorities action plan does all of these things. In fact, we built it to solve our money planning pain points. If you want to try it out, click here to get started!

And don’t worry, for those of you who are still interested in finding some good personal finance books, we’ll have a list of our favorites soon!