Managing your finances has many aspects. It’s good to have an emergency fund, spend less than you make, and save for the future. But there’s a big financial asset that many of us take for granted and it’s worthy of your attention. It’s what academics call human capital and what you might call your talent and skill. This is basically what you could use to make money, now or in the future. Some of this is specific to who you are. It can include your great looks, sense of humor, or natural ability to fix mechanical things. The other type of human capital is what you acquire. Two common ways of acquiring human capital are through formal education and job experience.
So if you feel that you’d like to have more potential resources to enjoy life and have more financial options, work on your human capital. There are several ways you might approach this. Getting more education can help you change your career path. That might seem like a lot of trouble to make more money. However, the Department of Labor data show that, on average, higher levels of education seem to result in higher income. Even if you borrow a reasonable amount in student loans and take time away from a full time job, an education could have a positive impact on your long term earning capacity and result in a brighter financial situation.
If going to school doesn’t seem like a good approach for you, a job that gives you training and develops skills is also an excellent way to make good use of your capabilities. Many of us get a job when we need income and follow where it takes us, without realizing we can make choices around our work that can provide more than just a paycheck. General skills we might get from work can be things like negotiation techniques, supervisory skills, and project management. Specific job skills apply specifically to your current or future job. It’s great to have these skills to give you more job security where you are and, hopefully, you can take those skills with you to another job if needed.
You can manage your human capital. Find work that you enjoy that pays what you need to live. If you need additional skills, explore how you can acquire those skills. If your employer is willing to send you to training or provide the skills in the workplace, pursue that and repay the employer with your loyalty.
Even if you’re about to retire, there may be ways to use your biggest asset that are financially rewarding and interesting. Having a change in career or a continuation of career beyond your planned retirement age can be personally as well as financially worthwhile. We all spend so much of our waking hours in life at work. Doing something you enjoy can also have a gratifying financial impact.