How to Understand Finance In 2024 As Beginners?

A strong financial foundation supports not just you but also your family. This is why learning finance is a great need to adopt at an early age.

But the problem arises when you decide to learn finance and can’t find a way to start it with a boost.

At this point, self-doubt about how to understand finance for beginners becomes the first barrier to stopping your journey even before it begins.

You think it’s a mess! Absolutely not.

Here we are going to take our first step as a tag team to learn the most essential fundamentals of finance.

Let’s discover ahead how to understand finance in 2024 as beginners and start our journey toward the first phase of financial freedom.

7 Basics to Understand Finance For Beginners

Finance is a vast subject to learn and get expertise on it. As a beginner, you must follow the top 7 basics of finance. These 7 basics are easy to understand and apply to one’s life.

Savings

The first step of finance starts with Savings. Savings is the foundation of finance. No success can be achieved in the financial world if one doesn’t know how and when to save money first.

You must adopt a lifetime habit of saving first. This is the first win to conquer the finance world. The more you can save, the better you can use it to make your fortune in finance.

Budgeting

The second most important basic of finance is Budgeting. It is a simple yet challenging balance between spending and the surplus you have left. Budgeting simply allows you to make wise and smart decisions with your money.

It is a sheet to observe and calculate your income and expenditures. Best budgeting always makes your income greater than your expenses. It means you directly hit the first basic of finance i.e. savings.

Debt

The next fundamental of finance is Debt. Beginners must learn how not to get trapped in bad debt as well as how to clear their loans/liabilities and come out of debt ASAP.

Remember there are Good debts too. Good debts have the potential to maximize your asset value and net worth. You must use ‘Good Debts’ but try hard to get distant from Bad ones.

Emergency Funds

As the name suggests, emergency funds are those funds that protect you from being money-drained in unexpected events in life.

Emergency funds support you financially in your crisis and save you from going into debt. This includes medical emergencies, sudden big expenses or losses, and family monthly expenses for at least 4-6 months.

Retirement Plans

This is the most taken-for-granted subject for people who wish to learn finance. On the contrary, it is the most needful and compulsory area to work on. The sooner the better.

Therefore this fundamental is going to be a little descriptive.

Once you have started saving your money wisely, budgeting your income and expenses, clearing off all debts and loans, and finally securing emergency funds for unforeseen events

you must start putting your money into a good retirement plan simultaneously.

A retirement plan is your best buddy, your strength to face odds in old age and a luxury to live your life happily as a senior citizen.

For many people, life has been never less than a curse, simply because they never understood the importance of a retirement plan when they were young.

Later on, they regret when they get older and lose their source of income and reason to live self independently.

If you are willing to learn and apply finance learning to your life, never make such mistakes even in your dreams.

Insurance

Congratulations! You have almost completed the essential basics about how to understand finance as a beginner. You have set your goals to reach your financial stability.

But wait! Don’t get trapped soon in overjoy. Whatever you have learned and gonna do in real life, could be wasted if it is not secure!

To protect yourself, your family, and your hard-earned capital you must get insured. Buy essentials insurance to cover yourself 360 degrees.

Get health insurance for expensive medical bills and life insurance to cover your family if you are not there to be with them.

The same goes for Car insurance, severe illness cum accident insurance, and so on. It is always better and safer to get insured before any financial disaster comes and ruin you.

Investments

As you have secured yourself completely from any financial mishaps now is the time to start your capital-building via Investment!

Simply saving and budgeting will make you able to accumulate money, but if you truly want to make money from money, Investment is your Magic wand, Mr. Potter.

Investment has a variety of tools to maximize your money like Equity, shares, ETFs, Mutual funds, Gold bonds, and so on.  But it comes with Risk too!

As a beginner, you must not directly jump into the equity market until you learn enough of this lucrative field. I would suggest you go for SIPs (Systematic investment plans) and Index funds initially.

Later on, as you gain knowledge and the ability to take risks, go with the calculative risk-reward scenario. 

Where to Learn Finance for Beginners Free

As a beginner, you are now familiar with the basics of finance and learned how to understand finance. Now it is time to know where we can learn about these 7 basics of finance free.

You can start it with digital versions of business magazines and newspapers (subscription-free). This will keep you in the habit of getting to know finance daily.

Start listening to podcasts and watch videos on YouTube related to finance awareness and knowledge. Most of them never charge money. So you can relax.

There are finance experts or advisors on FB, WhatsApp, and Telegram. You can join or follow them to gain more value for your finance skills.
{But join those only who seem genuine and authentic not money-chanting Greedy ones}

Reading easy and famous books on personal finance and money management topics will help you a lot.
some suggestions are ‘Psychology of Money’, ‘Rich Dad Poor Dad’, ‘Think and Grow Rich’, ‘The Richest Man in Babylon’, and ‘Financial Freedom’

Yes, books are not free! Either you manage from your friend circle as I do it often or you have to ‘INVEST’ in it a little.
I could say ‘Spend’ instead of ‘Invest’ but you never spend money on books if it is about learning a skill. You just Invest it in yourself!

Last but not least, Blogs. You can enhance your financial skills by visiting finance-based blogs regularly.

Blogs that introduce to you new learnings of finance, show new paths to capitalize on your skills, and help you to achieve your financial goals are your ‘Best Mate’ in this mission. Do follow them.

Free Courses to Learn Finance For a Beginner

Well, many of you must be tempted to enrol in free courses that could improve your finance skills right? Here we are.

As a beginner, it is very challenging to find the most appropriate finance learning courses that offer basic to advanced concepts of finance, that too FREE!

Here is a list of some online sources, where you can enroll yourself in courses for beginners with free certificates.

Great Learning

Udemy

Udemy is another online platform to reach and learn finance courses. Though Udemy provides paid courses, it has free courses too for beginners with engaging animation videos.

Udemy’s ‘Personal Finance 101: Everything You Need to Know’ course is free to learn finance. This course lasts 3 hrs. and over 75,300 students have benefitted from this free online tutorial.

Udemy provides no certificate for this course. But you can enrol in this to learn personal finance tips.

ALISON

‘Advanced Learning Interactive Systems Online‘ i.e. the meaning of ALISON.

It also provides free online certificate courses. There are loads of financial courses available on this platform for you. such as-:

‘Introduction to Life Insurance and Retirement Savings’, ‘How to Take Control of Your Finance’, ‘Basics of Debt Management’, ‘Financial Freedom Beginner’s Guide’, ‘Basics of Financial Management’, and ‘Introduction to Managing Your Finance Debts.’

Within 3 hours of the course duration, you can enrol yourself along with more than 40,000 students and become an Alison Graduate by achieving an 80% or higher on all assessments.

Skillshares

Skillshares is another popular online learning community that offers all sorts of online educational classes including finance.

Though Skillshares is a subscription-based learning platform, it still provides a free trial by signing up and unlimited access to more than 35,000 online tutorials.

As a beginner, I recommend you to enrol in ‘My Financial Mountain: Understanding Your Path to a Solid Financial Foundation’. It is a free tutorial of only 24 minutes. This course will cover topics such as ‘saving for the future and financial planning’ to understand finance for beginners.

Mind it! You won’t receive any certificate for completing this online class. And yes don’t forget about the free signing-up rule. You can cancel the free trial at any time before it hits the paid subscription line.

Otherwise, in that case, you will be charged for the annual premium plan.

FAQs

What are the basic concepts of finance?

Ans- Some basic concepts of Finance are Cash flow, Time value, Saving, Net worth, Budgeting Revenue, Taxes, Inflation, Liquidity, Asset allocation, diversification, Risk tolerance, Depreciation, Amortization, Credit, Investing, Interests, Finance statements etc.

What are the 4 main financial literacy?

Ans-The 4 fundamental pillars of financial literacy are debt, savings, budgeting and investing. In financial literacy, it is very important to determine your financial values and establish financial goals.

What are the 3 types of finance?

Ans- There are three primary areas where finance can be divided broadly. These are Personal finance, Corporate finance and Public finance.

Is Finance in demand in future?

Ans- YES. Finance is still in high demand. Growing demands for financial skills have brought digital transformation in finance. This has given rise to fintech. Demands for qualified finance professionals will remain high in upcoming years.

In NutShell