The more I read about finances, the more I have come to realize that there a really aren’t any quick fixes or secrets to success. The best way to go about handling your finances? Work as hard as you can to stay out of debt and put back your money into some investment. (I make a few suggestions for investment options in this post and also in this post)
That is probably the best advice that a person can get when it comes to money management. Now, I do not have any sort of advanced education in regards to finance. I do not even run my own business (yet). However, I have learned from experience that financial stability is a long process that takes time and patience. And, even then, a person needs to subscribe to some excellent guidance to get there.
About three years ago, I started paying more attention to the way financial stability works. I had always thought that a person could just stick their money in a standard savings account and they would be fine. People, this is not true. The interest rates on savings accounts are so low that you might as well bury all of your coins in your backyard. You will get close to the same return.
So, I started looking at the best advice, based on my own experience, that I could give to someone starting out this journey. Here they are. I hope they are helpful.
Zach’s Top 8 Money Management Tips
- Set your goals up front. You must have a plan for what you want to accomplish. If you just put a thought in your head that you will invest money whenever you get a chance, it will never happen. A good way to start (or this is how I did it), is by setting aside a dollar a day. By years end, you will have $356 dollars to start investing with. Then, set up a Scottrade account and start buying dividend bearing stock.
2. Schedule your money goals on a calendar. Once you figure out what your goals are, write them down somewhere. Put them on a calendar and stick it on your fridge. Put is somewhere that you will see on a regular basis. This reminds you of two things. First, that you are moving forward and second, that you don’t have forever.
3. Don’t set your goals too high at first. Many people decide they want to save enough to retire on in just a few years. They are diligent with what they put back at first but it becomes cumbersome after a while. Set reasonable goals at first. Once you start seeing success in your plan, raise the amount you are putting back. It’s always okay to increase your savings. However, decreasing the amount should always be avoided is possible.
4. Settle your mind on saving. Spend some time convincing yourself that this is the right move. Don’t put money into an investment account with the lingering doubt of whether or not it is the right move. Read up on finances. Educate yourself that planning out your finances is the right move for you.
5. Make sure you are making what you’re worth. Many people will accept a job that pays far less than they are actually worth because they are unaware of their value. Do the research. Know what your degree is worth. Figure out what your resume’s value is based on your work experience. Then, take that extra cash and invest it.
6. Keep track of what you spend. Now, dislaimer…. I am not the best at this. I don’t watch my gas station purchases like I should and, from time to time, my bank account will not line up with where I think it is. However, I know that this is a huge gap that I need to close and so do you. If you do not know where your money is going, you cannot account for it and it’s lost. Keep track of your purchases. Over time, you will start identifying areas that you can cut and transfer to your investments.
7. Pay off ALL of your debt. Dave Ramsey would say that this should be number one on the list. It is simply that important. The book of Proverbs tells us that the borrower is slave to the lender and we need to apply this truth to our lives. The interest on the loans that you are paying to someone else could be sitting in an investment account right now rolling interest and dividends for you instead.
8. Keep your investments somewhere seperate from your checking account. If the money that you are saving is somehow attached to your checking account, it becomes way too easy to spend. You need to have a few steps in the process. Investing through Scottrade makes my money a little more secure for me. In order to get it back, I have to sell my stock and then wait on a check to arrive in the mail. I creates a buffer against impulse moves.
So, there you have it. Like I said, this is not expert advice. I am working my way through this strange life like all of the rest of you. However, these are some things that have worked for me. Check it out, give it a try and let me know how these moves work for you.
Life is Strange. Live it Well.