How to Enhance Your Money IQ

Are you tired of being clueless about your finances?  Do you find that there’s very little of your paycheck left over after everybody you owe money to gets their cut?  If you answered a resounding “YES” to these questions, you my friend need to enhance your money IQ.

What do I mean by “enhance your money IQ?”  Well, let’s get something straight: this won’t be easy.  There’s no pill or quick fix for a lack of financial knowledge.  So, I mean that this is going to be something you need to work on.

After all, you can’t enhance your lung capacity by sitting on the couch and then expect to run a 7: 00-minute mile.  Sorry, it doesn’t work that way.  Instead, I’m talking about the type of situation where you just need to grind it out.  You need to learn money, breathe money, and accept financial literacy as part of your lifestyle.

In the end, you need to be a master of your financial situation and not a slave to money’s lure and perceived power.  Having the ability to enhance your money IQ is a blessing and not a curse.  If you take it seriously, it will pay dividends for years to come.  In fact, you will be able to help others avoid the frustration, bitterness, and resentment that comes from a lack of money IQ.

With the stage set, let’s dive into the areas that will steadily enhance your money IQ.

Be an informed consumer.

Do you read books and blogs?  Do you listen to podcasts?  I’m sure many of you do.  But, what subjects are covered in all this media you consume?  Is any of it financial related?

If so, great job on your part.  It really is no big deal to listen to an audiobook or podcast about personal finances while you’re driving to and from work, on your lunch break, or while you’re working out.  I have an hour commute each way from my job.  I try to fill that time with learning about finances or personal growth.

To truly enhance your money IQ, you need to consume information on (you guessed it) money.  Don’t overwhelm yourself at first.  Listen to one podcast episode per week.  Then, increase that to 2 or 3 times per week.

Continue to do it until you are learning something about money every day.  It can be an audiobook, podcast, or just read one article per day.  Consume financial information and you will be shocked at how much you learn.

Teach others and share your knowledge.

Oftentimes, the best way we learn anything is by teaching others and sharing our newfound knowledge.  This is incredibly important when it comes to your goal to enhance your money IQ.

So, remember all of that financial and money media you’ve been taking in?  Well, you should be sharing your lessons learned with your spouse, friends, family, and co-workers.  You may be surprised how much you know that they don’t know.

The benefit to them is that they learn something and can then do their own research if they want.  The benefit to you is even greater because you are becoming your confident in financial matters.  To truly enhance your money IQ, you need to be able to talk about it and teaching others is a perfect place to start.

Practice great money habits and be an active participant in your personal financial matters.

You’ve learned about money.  You’re comfortable talking about money.  Now, you need to be sure you’re putting it into practice.

What good is all this knowledge if you’re not doing anything with it in your personal finances?  That means you need to be budgeting, saving for an emergency fund, and contributing to a retirement account (at least up to the employer match level).

From there, you need to decide if you want to rent or buy a home.  You need to budget for a wedding if you’re not a couple looking to get married and then children down the road.  You need to pay off that student loan debt and credit card debt.

These are the things people with high money IQs think about, talk about, and take action on.  Are you ready to be one of them?

Accept failure as part of your financial life.  But, be sure to learn from it.

If you fail at something, are you failure?  This one is easy.  No, you’re not a failure if you fail.

Guess what?  You will fail on your journey to enhance your money IQ.  It’s all but guaranteed.

What separates those who constantly failure from those who are successful is what I like to call the “failure conversion rate.”  Basically, it’s the number of times you turn a failure into a positive learning experience and how quickly you do so.

Let’s say you blow your budget this month.  Yeah, that’s not good.  Maybe it wasn’t necessarily your fault.  You just needed new tires or something.  Nevertheless, you still blew the budget.

Now, you can just note the failure and move on.  Or you can learn from it.  You had a surprise expense this month.  Well, how big is your emergency fund?  Don’t have one?  Make that a line item in next month’s budget until you have $1,000 saved.

That’s converting a failure into a positive learning experience – and that’s how you enhance your money IQ.

Learn discipline in other areas of life to enhance your financial discipline.

Discipline and self-control are the cornerstones of a great life.  I understand that discipline comes with some poor connotations.  If you went to Catholic school all your life like I did, it meant going to the principal’s office, getting disciplined, and getting detention.  Fortunately, for me, that didn’t happen too often!

But, the type of discipline I’m referring to doesn’t involve anyone but yourself.  It’s the discipline, self-control, and growth mindset that’s cultivated between your ears.  To understand and foster the mindset of great money management and increase your money IQ, you need to harness this discipline.

How?  First, you need to implement and own all of the lessons in this article.  I’m being serious here.

Furthermore, you need to cultivate a disciplined mind in other areas of life.  You can do this through physical activity like running, learning an instrument or another language, or through prayer and meditation.

Sometimes you will need the physical activity to distract you and get the blood flowing.  Other times you will need to relax, be calm, and focus your mind on prayer.  Both are required to enhance your money IQ and make you successful.

Ask questions, be humble, and always be a student.

We have come to the final tip to enhance your money IQ, but that doesn’t mean it isn’t an important one.  Asking questions is the hallmark of an intelligent person.  Always have an inquiring mind that seeks knowledge and self-growth.

Also, never forget that you don’t know everything.  If you’re the smartest person in the room, you’re either delusional or you need to find another room.  Be willing to get out of your comfort zone.  Be humble enough to realize that there is so much you still don’t understand.  And that’s OK.

Lastly, always be a student.  Be a student of money and finances.  Be a student in your relationships with others.  Be a student of life.  A student asks questions and possesses the humbleness to let life teach him or her something of value.

Conclusion: Keep going.

If you want to enhance your money IQ, you know that this article is only the beginning.  You are the one who has to put in the time and do the heavy lifting.  However, if you take any of what I said to heart, you will have a solid foundation to work off of.  Good luck to you on your financial journey and remember to learn from your failures.  Experience is the best life lesson and you will learn plenty along the way.

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