Don’t get me wrong – I know that this is a very general and vague title. The idea probably isn’t too amazing to you either right, I mean everyone knows that learning new (useful and applicable) skills broadens the potential of your employability and allows you to actually identify where you can save more money. It’s probably the most intuitive concept in the world – being a jack of all trades gives you a greater ability to interface with a greater portion of your environment.
There are two approaches to be aware of in how learning new skills help you save money. First, the new skills will generally increase your awareness to your financial surroundings. You’ll be able to focus on things like reducing your taxable income, budgeting, or investing in profitable ventures. Meanwhile, increasing your ability by increasing the number of employable skills you command will allow you to live at a higher standard.
If you think about it, this is a rather paradoxical way you can save money. A person with $1,000,000 will have an easier time saving than a person with $10,000 because the purchasing power of money scales exponentially for individuals.
The second approach is a bit more difficult to understand, so let’s just highlight how learning some new mathematical, logical, or organizational skills may apply to helping you save money through increasing your financing awareness.
The Impact of Financial Knowledge on Savings
Warren Buffet once remarked:
“Risk comes from not knowing what you’re doing.”
Knowledge is power – or so the conventional expression goes. In this case, knowledge is power and power is money and that means that the more knowledge you have the more money you have. At the end of the day, the more money you have means the more savings you will have and this is the basic outline of how financial knowledge translates into increased savings.
In other words, the more certain you are about what you’re doing, the more productive and valuable your actions will be. There are a few financial skills that you should consider looking into if you are trying to focus on developing skills that will save you money – calculating your taxes, budgeting, and investing. Nurturing these abilities will have a direct impact on your savings on a general level.
The sentiment that everyone hates being taxed is probably universal. For instance, my friend recently got a $35,000 signing bonus that evaporated into $17,000 because it was taxed at the same bracket of someone making $35,000 in two weeks. But at the same time, everyone acknowledges that taxes are necessary in order for a society and governments on the local, state, and federal levels of function – no matter how much money ultimately ends up squandered by bureaucracy.
So, while it’s obviously illegal to evade and avoid paying your taxes, there are a number of big ways you can make a difference. All of those methods relate to how you’re able to reduce your taxable income. Raising your skill in identifying how you can reduce your taxable income by taking actions such as investing into your company sponsored 401(k) retirement plan or reporting depreciation of your work assets to the IRS are some of the biggest examples.
Of course, in order to best capitalize and learn it’s important to find the right people. Lexington Law has an abundant number of professionals that can help you with repairing credit.
Budgeting and Investing
While these are arguably separate skills they are like the bread and butter of saving money everywhere. Budgeting is like plugging the holes of your leaky bucket while investing is like trading away your bucket of water to someone else for another commodity that will be worth more in the future. You just have to replace the water in this analogy with cash and you’ll have a good sense of how each of these skills work in tandem.
Budgeting is key for helping you store up enough money for life milestones like your first car, your dream wedding, your first house, or your child’s college education. Getting a grand perspective of all of your financial expenditures is really all you to reign in your excessive spending on unnecessary luxuries.
Meanwhile, investing is a way that you can leverage the existing money that you have. Familiarizing yourself with the typical financial instruments involved in investing such as stocks, bonds, options, futures, and so forth will allow you to make educated decisions when it comes to investing in things such as mutual funds and other “safe” indexes.