Why Every Consumer Should Have a Handle on Basic Accounting Skills

Isn’t it enough that you’ve graduated from high school and are now out in the workforce trying to eke out a living for yourself and your family? Why do you need to know anything about basic accounting skills? That’s a question altogether too many people ask themselves but those are probably the very same people who have trouble balancing their budget – if they’ve even set one, that is! Perhaps you should take a realistic look at your life and finances. First determine if you are just getting by or if you’ve been able to put money aside for your kids’ college education or your own personal retirement. If you are not satisfied with your answers, then it’s time you understood why you should have a handle on some very basic accounting skills.

A Quick Look at the Most Important Accounting Skills for Consumers

There is actually no difference between the accounting skills you should master as a consumer and those which every accountant has mastered along the way. The only difference is that an accountant goes into much greater depth in their studies while you only need the very basics to take control of your personal finances. According to the graduate department at Merrimack College in North Andover Massachusetts, the most important accounting skills are (in no particular order):

• Attention to detail
• Math skills
• Basic analytical skills

Yes, those are the skills which are the foundation of a graduate degree in accounting, but if you look closely at them, they are also the very same skills that will help you take, and keep, control of your personal finances.

How to Apply Those Skills to Your Personal Finances

For a moment, think about where you stand in terms of your lifestyle. Are you so bogged down in debt that you are literally living from hand to mouth? Perhaps the root cause for this isn’t necessarily spending beyond your means but rather making poor choices on those things you do buy. For example, what are the interest rates on your mortgage loan? Are you only making minimum payments on several credit cards to keep your credit score from falling? In fact, how many of those credit cards are costing you more than you anticipated because you didn’t understand the difference between interest rates and APR?

What to Do with What You’ve Learned

Now compare those common complaints to the most important accounting skills. If you had paid attention to detail when seeking a loan or credit card, you would have understood how those rates would affect your bottom line payment every month. Did you take the time to analyze those cards or home loans when comparing rates online? Did you calculate the ultimate cost accurately or were you only looking at monthly payments? This is an area in which most consumers fall short and why so many have trouble setting and sticking to a budget. It only takes a few basic accounting skills to help you take control of your finances and from there you can work towards acquiring the wealth you need for college funds or retirement. Can you see now how those basic accounting skills are more important than you knew?