What is Financial Intelligence?
Financial intelligence is the ability to understand and effectively manage one’s financial affairs.
It involves a combination of knowledge, skills, and attitudes that enable individuals to make informed decisions about their financial resources, both in the present and in the future.
To be financially intelligent, you need to be competent in the following areas:
- Budgeting: Creating and maintaining a budget, allocating money to different expenses and savings goals.
- Investing: Understanding different types of investments, risks, and returns, and choosing appropriate investment strategies.
- Debt management: Understanding the costs and risks associated with borrowing money and managing debt responsibly.
- Financial planning: Developing and implementing long-term financial plans that align with personal goals and priorities.
- Risk management: Understanding and managing financial risks, such as loss of income, unexpected expenses, and market volatility.
Understanding Financial Intelligence
Financial intelligence is a vital aspect of personal finance. It comprises core components and requires a range of skills and competencies. Understanding these components and skills is crucial to developing financial intelligence.
What are the components of financial intelligence?
The core components of financial intelligence include financial literacy, numeracy, and emotional intelligence.
Financial literacy is the knowledge and understanding of financial concepts, such as budgeting, saving, investing, and debt management.
Numeracy involves the ability to use and interpret numerical data, such as financial statements, ratios, and investment performance metrics.
Emotional intelligence is the ability to manage emotions, and behaviours related to money, such as impulse buying, financial stress, and procrastination.
Skills required for financial intelligence
- Critical thinking and problem-solving: The ability to analyze financial information, evaluate options, and make informed decisions.
- Communication and collaboration: The ability to communicate financial information effectively and work with others to achieve financial goals.
- Planning and organizing: The ability to set financial goals, create a financial plan, and manage resources effectively.
- Adaptability and resilience: The ability to adapt to changing financial circumstances, overcome setbacks, and manage financial stress.
Benefits of financial intelligence
- Better financial decision-making
- Increased financial stability and security
- Improved quality of life
How do I become financially intelligent?
- Increase your financial knowledge
The first step in building financial intelligence is to increase your financial knowledge. Learn about budgeting, investing, saving, debt management, and other personal finance topics. Financial literacy is the foundation of financial intelligence.
- Track your spending
This can help you identify areas where you can cut back and save money. You can use tools such as budgeting apps or spreadsheets to track your expenses and create a budget.
- Start saving
It is important to start saving early and consistently. Set up automatic transfers to a savings or investment account. The key is to make saving a habit and prioritize it over unnecessary expenses.
- Invest wisely
Investing is a critical aspect of building long-term wealth. You can start by investing in low-risk options such as mutual funds or index funds. It is important to understand the risks and returns of different investment options and diversify your portfolio.
- Manage your debt
Debt can be a huge obstacle to financial intelligence. It is important to manage your debt responsibly and avoid high-interest debts.
- Create a financial plan
A financial plan helps you prioritize your financial goals and develop a roadmap to achieve them. Your plan should include short-term and long-term goals, such as building an emergency fund, paying off debt, and saving for retirement. Review your plan regularly and adjust as your financial circumstances change.
- Practice financial discipline
Financial intelligence requires discipline and self-control. You can practice financial discipline by sticking to your budget, avoiding unnecessary expenses, and resisting the temptation to make impulsive purchases.
Common mistakes to avoid when building financial intelligence
- Lack of financial discipline
- Failing to plan
- Investing without understanding the risks
- Neglecting financial education
- Ignoring financial risks
Recommended resources for improving financial intelligence
Books
There are many books available on personal finance and investing that can help you improve your financial intelligence. Some popular books include “The Intelligent Investor” by Benjamin Graham, “Rich Dad Poor Dad” by Robert Kiyosaki, “The Total Money Makeover” by Dave Ramsey, and “The Millionaire Next Door” by Thomas Stanley and William Danko.
>> See more: 7 Must-Read Books About Wealth
Financial Blogs and Websites
Some popular blogs and websites include Cowrywise, The Balance, Investopedia, NerdWallet, The Simple Dollar, etc.
Financial Advisors
Financial advisors can provide personalized advice and guidance on personal finance and investing. They can help you develop a financial plan, manage your investments, and make informed financial decisions.
Financial Podcasts
Some popular podcasts include “The Dave Ramsey Show,” “ChooseFI,” “Afford Anything,” and “BiggerPockets Money.”
Bottom Line
Building financial intelligence requires a combination of knowledge, skills, and the right attitude. By following the steps outlined above, you can develop strong financial capabilities and achieve long-term financial stability and security. Remember that building financial intelligence is a journey, not a destination, and requires ongoing learning, practice, and discipline.
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Does Cowrywise have 2FA on its app?
Yes Deji. https://cowrywise.com/blog/two-factor-authentication/
This is an amazing article, Cowrysiwe. Kudos to everyone who worked on it.
Really nice article, keep it up Cowrywise and thanks for the awareness.
Thanks for these eyes openers.
Guys you are the best always
But,you should have resolved Funmi’s complain before she made it public.so,was the court order gotten?If it took forever for a funmi to get her funds back, what happens to people without clout?
Let me explain. While Obama was at a rally, someone from the crowd shouted at him about how immigrants were been deported. The issue was that these were illegal immigrants who were working honestly but contributing to America’s workforce, and hence it’s development… But it was tough, they are still illegal immigrants, right? So Obama replied: We [America] are a country of immigrants, yet we are a country of law. How do these two things cohabitate? The answer is: reasonable compromise.
It might be hard to explain to you that it wasn’t the clout that made her get her money, it was months of hard work in tracing the suspected thieves and following the law. The funds were transferred in a normal way any funds will, and the best thing was to work with Funmi to get the money back… By following the law. Unfortunately it took more time than Funmi’s patience, but eventually.
As a Software Engineer myself, one requirement is to always think and be ahead of the intruders… But you’d be surprised that as much as we try to make things for consumers that make their lives easier, there are people somewhere who’s purpose is to destroy that work. It’s tough but possible. We can stop them, or at worse, recover our stolen funds or losses… Even Twitter and other famous website gets gamed or hacked. Is this a justification for Funmi’s case, no. It’s just a point to help you understand, these things are tough. And we all have a role to play.
But we’d hold your hands all through. Trust us.
Impactful and mind opening
Funmi made our cowrywise even stronger?
Thanks for the eye opener. Does cowrywise have 2FA.
Yes we do now, Ifeoma https://cowrywise.com/blog/two-factor-authentication/
Nice one
My account was flagged because of a transaction I made and my 2000 is hanging. How do I get it back????
Thanks for your patience. A flag is initiated when we suspect a transaction, and it is designed to keep you safe. Have you filled out the verification form we sent, please?
My account was flagged I don’t know why and my 90000 is hanging. How do I get it back????
My account is flagged ?and I send a send to be open back I fill the forms and everything? It a week now till eating ,I need the money for business pls u guys should help me ,I can’t even send massage for help ,it only show before massage and she is not reply am getting scared already
This is enlightening. Cowrywise, thanks to your team.
Thanks cowry wise. For a more detailed information on this issue. Thank you.
Insightful and Enlightening. Thanks
Why do I need to my bvn to cowrywise, I don’t feel that is necessary since have already linked my atm card
Why do I need to add my bvn to cowrywise, I don’t feel that is necessary since have already linked my atm card
With your BVN added, we can ensure that withdrawals only go to your bank account.
how do i unflagged my account?
This is a very insightful article. Thanks.
Thank you.
Please I have been asking and begging to unflage my account and no attempt from you please I will still be pleading again unflage my account so I can top up my savings I have sent emails upon emails chart on charts but no attempt to unflage my account was made please unflage my account
un flagg my account why is that flagging thing just common. now i cannot withdraw my saving when i have plannned to use to t
o buy a system
Good insight from Cowrywise team
More win ?
Is it working
Hi ope, I want to withdraw my savings but I am finding it difficult because they keep asking me to put another maturity date which I don’t want to extend that very savings. This is my first time of withdrawal on cowrywise.
This is super enlightening. Thank you Cowrywise ?
I learned a lot from this kudos to the writer