Personal finance is a huge topic that makes many people uncomfortable. However, by clearly defining exactly what it is and what it is not will make taking the first steps towards improving your own personal finances much easier.

It’s Personal:

Personal finance is all about habits, behavior and character. YOU are the problem with your finances, but you are also the solution. Yes, it’s important to learn about interest rates, taxes, and investment statistics, but these are a distant second to changing your thought patterns and establishing smart behavior patterns for saving, spending and giving. It’s about envisioning your future and setting goals. Imagine how your life would be different if you had no debt and were living every month on a budget. How would you feel if you had 6 months of expenses saved for emergencies and were investing regularly for retirement? What would you do if you had tens or hundreds of thousands of dollars to give to others in need?

It’s Yours:

No one can utlimatelty do as good a job at handling your finances as you can. You worked hard for your money, and it’s your reponsibility to manage it. Money flows through every part of your life, and if you don’t know where it’s going or what it’s doing, it’s going to leave you. It might be a little at a time (Starbucks every morning or that new car on payments you can’t afford) or all at once (gambling, Madoff, etc.), but it will leave. You are in charge of your money and your financial future, and don’t put money in something you don’t understand.

The Concepts are Easy:

The basic concepts of personal finance aren’t rocket science. You don’t need an MBA or an accounting degree, and you don’t need to be a math whiz. Laying out and sticking to a budget is simple arithmetic, and compound interest can be demonstrated easily with online financials calculators like these. I learned everything on my own just like you will.

The Goals are Hard:

Even though the concepts aren’t hard, actually winning with money is hard. It takes discipline, sacrifice and patience. People usually become wealthy not with sophisticated strategies or get-rich-quick schemes but instead by intentional and systematic good decisions with money over years and decades.

At the end of the day, you must make informed decisions about your money and your future. Don’t blindly take my word or anyone else’s on what to do with yout money. Learn more about these concepts on your own and understand them for yourself. Then apply them everyday and watch your money grow. That’s personal finance.