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3 Money Concepts You Should Understand to Improve Your Financial Life

not all about stuffTime is Money, and Knowledge is Power. Depending on how you conceptualize and actualize these concepts, you can learn and apply techniques that will get you pretty far in the world. If we’re looking at our finances specifically, there are a number of concepts which, if better understood, we could turn into savings and greater wealth. Some of these processes will take months or years to pull off, but they are tried and true. All it takes is a few minutes to wrap your head around these ideas, and the opportunities they create will help you out for the rest of your life.

Payment Protection Insurance

Payment Protection Insurance, or PPI, isn’t so much the idea we’re trying to convey here. It’s the story which surrounds PPI. There’s currently a big scandal going on in the UK, because insurance companies “sold” PPI to lots of people without the buyers actually realizing it. PPI is a way for consumers to get insurance to cover their missed payments, in the event that they lose their job or get injured.

It’s a good product, but the offer was, in many cases, buried within hundreds of pages of contracts when people were applying for mortgage loans and the like. The lesson here is to 1) know what you’re buying and signing, and 2) to check your financial accounts frequently for unfamiliar payments. In many cases you will find that you are spending money on something you didn’t ask for and that you don’t want. You’ll save a lot of money by cancelling that payment as soon as possible. A PPI claim company can help you if you find yourself in the specific situation described above.


This will be old news for some readers, but others won’t quite get the concept. Equity is an amazing wealth building tool, usually implemented when someone buys their first home. When you buy a house, you’re using “other people’s money” to do it (a bank is lending it to you). But as you pay it back, you get to include the percentage of your house that you own outright as part of your net worth. It’s not the same thing as cash, but having property is a big part of becoming wealthy, and you can leverage it to much greater financial heights the more of it you have.

Credit Scores

Personal credit is complex, but there are some simple things which you MUST know. 1) The lower your credit score, the more lenders will charge you to borrow money. 2) Using a lot of credit (more than 30% of the credit limit on any card, for example) will cause your score to go down. 3) Asking to borrow money frequently will make your credit score go down. 4) The more you “live beneath your means” the more likely you are to have a high credit score.

There are plenty of other things you can learn about money, but these are three concepts that people should be able to understand but frequently don’t. Let those sink into your brain and you’ll set the stage for a better financial year in 2016.



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

1 Comment

  1. Handling your finances has never been easy. There a lots of temptation from everywhere that urge you to spend big. So, to counter your money problems the above-mentioned money concepts are what you really need to learn. You must know how to spend less and save more.

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