Money Management 101

Here’s another article by Finance Expert Brandon Lamb with some no nonsense money management tips (new to some, reminders for others… who, me?) :-)

No matter who you are, at some point in your life, you will have to manage your own money. Unfortunately, few of us receive any formal instruction for this essential skill. We must learn it the hard way – through trial and error.

Even in the best of times, the trial and error method is fraught with peril. Every mistake can be reduced to a dollar amount. In the past, maybe those amounts, while certainly unpleasant, weren’t crushing. Times have changed. The stakes are greater, and so are the penalties. Defaulting on a cell phone bill means $500 to $1000 on top of the amount already owed. If your car breaks down on the freeway, and you can’t afford to have it fixed, or even towed, it could cost you thousands of dollars in towing fees, even if you simply sign the title over wrecker so he can sell it. What’s even worse, these mistakes will be reported to the credit agencies, which can damage your financial health for years to come.

But perhaps the worst effect of money-management is the stress and worry it creates in your life. Did you know that the number one source of friction between married couples is money?

Now, I’m not saying that managing your money successfully will mean that you won’t ever worry about money. Probably the only way you’d ever stop worrying about money is if you owned a few thousand shares of Apple stock. But it can help you reduce your worry over money. And who knows, maybe even improve your relationship.

The first thing you should do is research. It’s the key to everything, and it’s usually free. Start out online. Find some financial assistance sites and absorb their free information. But please take their suggestions with a grain of salt. Not everything you read online is factual or even complete. Simply use this as a starting point, gleaning the most basic information. Then go to the library. What you need absolutely need to know is:

• How to balance your checkbook
• What interest rates are
• How to pay off loans
• How to save for retirement

Next, make a list of your financial responsibilities. Write down what you owe, who you owe, what the interest rate is, and minimum payment amounts. Be sure to include daily expenses, such as food and gas.

This is your basic budget. If you match these expenses to your monthly income, you’ll see areas you might be able cut costs as well as how much money you can set aside for retirement, or a savings.

One last piece of advice: Try to avoid credit card debt under any circumstances. Don’t charge anything that you won’t be able to pay off at the end of the month.

To learn more about how you can manage your money better, slash your spending, and put more money in your bank account, visit Brandon’s Slash Your Spending or read my review of his book.

Comments

  1. says

    Ros,

    Very interesting…

    Rosalind, what theme do you use for your blog?

    I also visited the click newz site after reading about it on your blog and that looks quite similar.

    Alan

  2. says

    Hi, Rosalind, going off the subject here, but I have been building my website after downloading your Super Affiliate Handbook and I am having a blast! Awesome material, exactly what I needed. I have another website for real estate and I have signed up for a couple of Affiliate programs for that website, but nothing big. My one question is I am having trouble trying to get drop downs in my menus on my website. I am using Bluehost for hosting and created my website through WordPress just as you suggested, but I cannot get drop down menus and I don’t know what I am doing wrong.

    Any help you could give me would be awesome! Thank you so much for everything! I really appreciate all that you are doing!

    Sacha

  3. says

    Ros, your themes run on Genesis framework correct?

    As for money management, it’s something that can be taught as well. I started at an early age bestowing the mindset in my children. If they wanted something, they had to save and make an informed decision – was it going to be the video game, or the trip to the movies.

    I still recall the first time hey saved to buy a video game console and went to the counter to discover “sales tax” … LOL! The look was priceless.

  4. says

    Like they say, it’s easier said than done. But I definitely agree with what you said about using credit cards. A lot of people are tempted in using their plastic money without even thinking if they’ll be able to pay them on due date. That’s when the trouble begins.

  5. says

    This is really true: Try to avoid credit card debt under any circumstances. Don’t charge anything that you won’t be able to pay off at the end of the month.

  6. says

    Two months ago, for the first time in our lives, my husband and I had to sit down and create a budget. We honestly didn’t know how much we made as opposed to how much we spent. Scary right? When we realized we were just meeting our bills + food with our income we quickly put on the brakes to the “I want this!” syndrome and instead spend on money on what we need. If you haven’t sat down and looked at your finances I highly recommend it!

    If we could go back and do it again we would never have used our credit cards as personal bank machines and instead we would have only spent what we had. The young mind that lives for the moment tends to forget about the ‘possible’ future!

  7. says

    One of my best money saving tips is this: Every six months shave down expenses. Download your bank statement and create a sum of the expenses by category. Work down the list and find ways to slash that expense. For example, find a cheaper insurance or electricity company. Challenge yourself to halve the expense if possible or do away with it altogether. Spend an entire day on this exercise every six month. Many people I have passed this tip on to have found an extra $400 each week! Those little expenses sure add up.

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