How to Successfully Manage Your Financial Life When You’re Not Financially Savvy

Distracted. That’s one adjective we’ve all used to describe one another in America today. Technology has made it easier than ever to put information right at our fingertips. This created access to an unlimited amount of information, but also a certain amount of confusion. Tech breakthroughs claiming to solve your latest road block seem to happen daily, and marketers are doing everything they can for just five seconds of our attention. With all of this unlimited information competing for our attention, many people have not taken the time to learn the basics of successfully managing their financial life.

This is particularly the case with young professionals and millennials in general. Does this sound like someone you may know?

  • They’ve held at least five jobs since graduating from college in 2007
  • Living in Chicago
  • Working as a Business Development Coordinator at a non-profit publishing association
  • Over the past few years, they have “just scraped by,” which they attribute to an unstable income and sporadic spending habits.
  • “I know I should not be leaving my finances up to chance anymore, but I have no idea where to start with any of this.”

Many young professionals and millennials share a similar situation. The FINRA Foundation surveyed 27,564 Americans from June through October 2015 to gauge their financial savviness. Their findings, released in the summer of 2016 as the National Capability Study, paint an alarming picture. According to the study, “nearly two-thirds of Americans couldn’t pass a basic financial literacy test, meaning they got fewer than four answers correct on a five-question quiz.”

Sobering, isn’t it? If you’re one of the many who might not be financially savvy, there are steps you can take to make sure your future financial life is one you want and look forward to.

Basics to help move towards financial security:

1. Work on financial literacy and overall understanding

  • When it comes to the world of personal finance, even basic knowledge pays dividends. However, the reality is most people would rather outsource these decisions to someone else. In this case, the best knowledge you can have would be to minimally educate yourself on the various types of advisers and business models. No one knows your situation better than you, so determining what role an adviser should plan in your financial life could be huge.

2. Learn how to create & manage a budget

  • Understanding your budget accomplishes two things: first, it ensures that you are living within your means, and second, it brings your current spending habits to light. Knowing your spending habits is one of the first steps in determining a reliable amount to save for retirement and unexpected emergencies. One of the most effective means for budgeting is to create automation. Automation eliminates the need for you to proactively stick with something that may seem like great effort or sacrifice.

3. Partnering with a fiduciary

  • Working with a fiduciary is extremely important. This is even more important if you are not well versed in the financial world because it ensures you are not being misled. The fiduciary standard makes it clear that your best interest is your adviser’s best interest. On the other hand, many other “financial advisers” are broker-dealers who are required by law to act in the best interests of their employers. Broker-dealers are required to use a disclaimer, clearly stating that their interests may not always be the same as yours.

This information about financial life is relevant to many. No matter where you are in your financial journey, I encourage you to understand these important steps and share this information with others. Gaining basic financial understanding in this way can help point you towards living their best life and leaving a powerful legacy. You can do the easy part of putting yourself and others in touch with a fiduciary adviser. Again, a fiduciary adviser is held to a strict standard that will put their best interest first. With the guidance of a fiduciary adviser, anyone can begin to make a positive impact on their future financial security. Want to know more and find a financial adviser near you? Click here to start a conversation with a fiduciary adviser.


Date Published: February 1, 2017

Authored By: Alex Jenison

Phone: (812) 603-6310


The information in this material is only as current as the date indicated, and may be superseded by subsequent market events or for other reasons. While all information prepared in this document is believed to be accurate, any statements of opinion constitute only current opinions of Payne Wealth Partners, Inc., which are subject to change and which Payne Wealth Partners, Inc. does not undertake to update. Accordingly, you should not put undue reliance on these statements. The information does not attempt to examine all the facts and circumstances that may be relevant to an individual’s financial needs. Payne Wealth Partners, Inc. is not soliciting any action based on these statements.

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