My financial New Year's resolutions

Some years I make resolutions, and some years I don’t. Some years I like having goals that guide my behavior, and other years I feel like January 1st sneaks up on me and I stumble into the new year without enough preparation to feel good about setting goals and holding myself accountable. This year is a goals year, and my goal is to talk more about the “missing link” in stock investing for new traders: personal finance. 

>  What is personal finance?  Personal finance is how you manage your money.

It’s understanding your sources of income (salaries, investments, side hustles), your expenses (food, shelter, funko pops), and using that data to budget for the coming months and years. It’s about understanding your own personal balance sheet and income statement. In video game terms, personal finance is an “early-game” skill that can unlock the “mid-game” activity of investing. 

>  Why is personal finance important?  Unless you have the luck to be born into a wealthy family, your ability to manage your personal finances will have an enormous impact on the quality of your life through nearly all stages of your personal development.

Earning some XP grinding the “personal finance” skill can help you become more efficient with the money you earn, spot new opportunities to improve your financial security, and protect yourself from making (and repeating) costly mistakes.

>  There’s no magical trick:  The path to leveling up your personal finance skill is one that you will walk for the rest of your life. There’s no shortcut. No stupid little trick to magically turn wasteful spending into profitable investment.

Personally, my biggest level-ups came through shifts in perspective. If you haven’t done a thorough cash flow audit of yourself in a couple of years, I challenge you to track every single peso you make and spend this January. Seeing all the money spent on streaming services that you don’t use might make you think.

Spotting a recurring charge that you stopped using 9 months ago (but have still been paying for) will open your eyes. But it’s not like you just do it once and you’re good. I have to do this every year to keep myself honest.