8 minutes

6 Steps to financial intelligence

Sep 20
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In the popular 2021 drama series "Squid Games", the second runner up (if I can even call him so), Cho Sang-Woo, was one who most fans like me wondered "what would have made an extremely successful and intelligent businessman agree to play this game? How did he get into so much debt in the first place?"

Cho Sang-Woo wasn't just an intelligent businessman, he was a star student during his school days. How can someone be so intelligent and knowledgeable in academics and even business but still not have financial intelligence?

Cho Sang-Woo's case is not a perculiar to only him. It is rather very common. Every parent wants an intelligent child. Someone who tops his or her class. Most families proritize education and literacy. Parents do not mind spending huge amount of monies (and even run into debts) just to ensure that their children get the best of education they can afford.

While so many parents are vested in giving their children quality education, same can not be said of them ensuring that their children have the basic financial intelligence and skills to go through life. As important as money is to us as people, children are not taught about it. Infact, for some families, money is a taboo topic. Noone talks about budgeting, investing, managing debts or other related money topics.

The end result? People grow up book smart but not money smart. Most people do not have the financial intelligence and capacity to handle money when they start making it and so, they can not make smart money decisions. Invariably, most people end up broke, in debt and depressed because of bad financial decisions.

Since no one teaches us about money and most people do not want to even talk about it, the onus lies on us as individuals to prioritize gaining financial intelligence and strive for financial literacy. It bohoves on us to learn about money.


Financial intelligence simply refers to having a proper understanding of money, how it works and how it should be used. It involves an understanding of one's finances and some basic accounting principles.

Financial intelligence isn't a subject for businesses and accountants only. Everyone needs to be financially intelligent. Why? Because we all deal with money! We need money to live good lives (whether basic or lavish), we need money for our businesses. Infact, money is a basic necessity.

Robert T. Kiyosaki in his book "Rich Dad, Poor Dad" explains that financial intelligence consists of four main technical skills. They 

  • Accounting
  •  Investing
  • Understanding financial markets
  •  The law

According to him, a proper understanding of these four skills is paramount to being financially intelligent.

Just as Rome wasn't built in a day, attaining financial intelligence won't happen overnight. It happens over time as we dutifully, consciously and religiously give ourselves to learning about money and our finances. By being invested in learning about money and being open to taking baby steps to getting to know how money works and how it should be used, you are guaranteed to be financially intelligent and make proper and wise money decisions.


Since money is so important to us, we are left with no choice but to be financially intelligent. But although financial intelligence seems like a compulsion (because being financially unintelligent can be disastrous), being financially intelligent comes with a lot of perks. Some of the benefits of having financially intelligence includes:

  • It helps us to manage, reduce or totally avoid debts. Living a debt free life is a financial goal for most people but still, many people wallow in debt for one reason or another.

When we are financially intelligent, we are able to make better decisions on how to manage and use our money in such a way that we can avoid (or reduce) having to be in debts or better still, how we can take on good debts. Oh yes you heard me right. Debt can be a good thing too in some circumstances.

  • It helps us effectively manage our finances and identify loopholes that causes us to lose money. Being financially intelligent helps us to understand and effectively manage our finances. In this way, we are able to easily recognize loopholes through which we lose money, mostly by way of unnecessary spendings or by over spending.

  • It helps us identify financial fraud and scams. One of the basic perks of being financially intelligent is understanding that money does not multiplied overnight but rather, it grows overtime.

Financial fraud and scams are prevalent all over the world and continue to drain people's finances because people are financially unintelligent and do not know how money works.

Being financially intelligent helps us to recognize financial fraud or scams when they pose themselves as business opportunities, thus saving us the heartbreak of losing our much needed monies.

  • It helps us to make better financial decisions that leads to the growth of our wealth. Financial intelligence helps us to make wise decisions on savings, budgeting, investments, mortgages, insurance and basically anything that can affect our potentials to grow our income and finances.


Now that we know what financial intelligence is and how benefial being financially intelligent is, the next question we should answer is, "how can I become financially intelligent?". Here, I have outlined six (6) steps to achieving financial intelligence.


The good old secret still applies to us today. Read! The very first step to attaining financial intelligence is certainly to read books that teach you how to be financially intelligent.

Luckily for us today, there are so many books, magazines, blogs available both online and offline that teach about how to manage your finances and be financially intelligent.

Dedicate some time everyday to reading about how to be financially intelligent and watch how you are able to better understand money and how to manage it.

For starters, I would recommend the infamous Robert T. Riyosaki's "Rich Dad, Poor Dad and Morgan Housel's "The Psychology of Money" if you are confused about which financial books to read. For magazines, the Forbes and the Economist are good magazines that can help you become financially intelligent.


Today, people are growing so increasingly busy that they barely have time for themselves. They are always on the go. Between having to work and do a side hustle, people are finding it diffcult to take out time to read. Well for others, they find it diffcult or simply boring to read books. 

Which ever category you find yourself, you can still get the knowledge and timeless advices and tips contained in books by listening to audiobooks or podcasts that relate to finances and how to be financially intelligent. 

Replace listening to music with listening to financial related podcasts and audiobooks to gain insights on how to be financially intelligent.


Nowadays, financial experts offer financial literacy courses aimed at helping us better understand money. These courses teach us how to save, budget and invest our income and how to effectively manage our finances.

There are literally tons of financial literacy courses both online and offline and taking those courses (after careful research on them of course) is a really smart way to gain financial intelligence.


While reading books and listening to podcasts, you can start doing some practical exercises to help you understand your finances. The first and surest place to start is by preparing a reasonable budget and religiously sticking to it.

Budgeting help us in two ways. Firstly, it helps us to identify our basic needs and channel reasonable amounts of monies to take care of such needs. Secondly, it helps us to track and manage how and what we spend our money on. Through budgeting, we can identify loopholes which cause us to loose money.

Thus, we are able to effectively understand and how we spend our money and take effective control of our finances.


Another practical exercise we can all carry out inorder to be financially intelligent is to prioritize saving money. When we budget, some of our income should be kept aside for saving. Also, work towards building an emergency fund. Financial experts advice that we save 6-10% of our income.

One thing we should all make sure to do is increase our savings as our income increases. Most people fall into the trap of "Lifestyle inflation" meaning that as their income increases, they increase their spendings to upgrade their lifestyle whilst not increasing the proportion of their income saved. 

Prioritizing savings helps us to control our spending and be objective in how we use our money.


Sometimes, managing our finances can seem confusing. With a limited income and a ton of bills to settle, debts to pay back or financial commitments to take on, it is easy to make financially unintelligent decisions that can negatively impact and impair your financial growth.

Recognising that despite all the books we read and how many financial advices tips we know, that we can still make costly mistakes when making financial decisions is in itself financial intelligence.

It is always a foolproof step to seek professional financial advice when confused about our finances or when we are about to make major financial decisions.


Becoming financially intelligent is one of the best financial decisions anyone can make. It is a sure way to achieving financial growth and wealth.

Just as I have mentioned earlier on, attaining financial intelligence is a gradual process and one does not arrive there overnight. We will need continuously study and practice financial principles to become financially intelligent.

The six (6) steps provided above are some sure ways of becoming intelligent and knowledgeable about your finances.

Are you financially intelligent? Apart from the steps mentioned above, what other things have you done to become more knowledgeable about your finances? You can share them with us.

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