Money Management

The CBS TV show, The Big Bang Theory teaches financial responsibility and discipline.

In Season 2 Episode 14, Penny needs money to pay rent and Sheldon lends her money. Sheldon lives below his means and saves up for the rainy days. In contrast, Penny lives “hand to mouth,” or paycheck by paycheck. She sometimes overspends and is often behind in bills.

Penny could not make rent and tells the story to Sheldon. Sheldon generously and gladly offers Penny his “secret” stash of money. He spends only what he needs and saves the extra money.

The lesson that can be learned here is that if we practice financial responsibility, i.e. spending less than we earn and have the discipline to control our spending we can avoid financial disasters like not making rent such as Penny does.

All consumers have a financial obligation to themselves for their future stability. Investing money towards retirement is an important aspect that many people delay either out of lack of money or due to basic misunderstanding of the investing world. Retirement may appear to be years off but people need as much time as possible to save enough cash towards the future.

Ideally, every working individual should begin stashing cash away for retirement starting with their first job. Employee-sponsored retirement savings programs should be reviewed and understood by young adults new to the workforce. Often the importance of saving for the long-term future is not even a consideration by the younger generation who wrongly believe they have plenty of time to worry about retirement. The reality is that the sooner people start investing for retirement, the more money they will be able to save in smaller increments. This makes investing and savings plans more reasonable and likely easier to achieve.

Fear Prevents Action

For working individuals that are not familiar with the basic strategies of investing, it can certainly help to start with a basic plan. Rather than become significantly overwhelmed by the investing world and the many vehicles available for goal- reaching, people need to start small and continue getting financial understanding of the next steps and the riskier investments.

A good place to start building your investment foundation is using a personalized retirement savings calculator that will allow you look at an estimated ‘big picture’. You can get a real-time look at what your projected investment earnings for retirement would be based on your current balance and the anticipated interest rates of the future.

Because many working people fail to create a visual of what the financial future may look like, few realize the importance of being timely and consistent with their retirement investing. Many have not set any goals towards their retirement future at all, making it much harder financially to get on track at a later time.

Time to Take on Opportunity

As you develop a solid understanding of the basic investment opportunities that are inline with your financial abilities and your future needs, you can begin exploring the other possibilities to make your money work for you. Investing does not just involve a solid savings plan it also involves growing your money with good interest rates. It involves making investments into assets that will increase in value and make your financial portfolio stronger.

There are many investment strategies that are riskier than others and the only way to determine what is worth the risk is by continually understanding the world of investments and by acknowledging where you stand financially. Maintaining a home budget with a budget worksheet is an ideal way to continually know how your money is being spent and allows you to allocate more cash to investments and retirement savings when necessary.

It is imperative that all working individuals place a priority on their savings plan for both the short-term and the long-term. Staying organized and progressive in your investment and savings pursuits allows for more financial decisions to be made. Even if you aren’t confident in your abilities to invest your money and choose to seek third-party broker help, you still need to be knowledgeable about your own financial affairs rather than set yourself up for failure by allowing someone else to control how your money works.

Debbie Dragon is a finance writer providing articles for Vertex42.com, a site that
offers a large selection of free spreadsheet templates and financial calculators.

Part of entering the “real world” is learning to manage your own finances. Money can be a drag. For something that is so essential to our lives, money certainly does cause an endless amount of stress. To stay on top of your finances and reduce the amount of stress that money causes you, follow these three
money management tips.

1. Automate Things: One of the best ways to save the money you make is by making it as painless as possible. Though it may sound trite, using automatic transfers each month to put some of your paycheck into savings can be one of the best ways to manage your accounts. All too often, we have our paychecks automatically put into our checking accounts and then we end up spending them. By scheduling an automatic transfer from your checking account to your savings account every two weeks or so, your savings will grow without you really realizing it. Furthermore, arrange to have your bills taken directly out of your checking account when they are due. This will make it easier to budget and you’ll never have to worry about forgetting to them. Building savings can be painful. Having to take a chunk of your paycheck each month and put it into savings can feel like you are losing money. Make things easier on yourself, by making this transfer effortless.

2. Know Your Credit Score: If you’ve attended college, bought a car, or owned a credit card, you have a credit score. Once you borrow money from a lender, that lender reports to the nation’s three credit bureaus and the bureaus calculate your credit score. This score is generated from your credit usage and payment history. With catchy jingles and numerous silly commercials, people hear about credit scores all the time, but rarely know the actual number attributed to their credit. This number is used to determine what loans you can get and at what interest rate you will get them. Needless to say, your credit score is important to managing your money. Many landlords check credit scores before renting to you. Also, some perspective employers may evaluate your credit score before offering you a job. Your credit score can be an indication of your level of responsibility. Review your credit report periodically to make sure that it has no mistakes. Keeping on top of your credit score will force you to better manage all of your finances.

3. Prepare a Will: Though this may sound morbid, preparing a will early is important. A huge part of managing your money successfully is being responsible with it. Part of financial responsibility includes managing your finances after you are gone. Hire a lawyer to craft a will, a durable power of attorney, and a living will. Though this may cost you a hefty sum up front, it may save those you leave behind thousands in taxes and fees. Furthermore, through the process of crafting a will you will have to gain a thorough understanding of your financial situation and take a look at your future financial prospects. Developing this plan and fully understanding your financial circumstances is essential to properly managing your money.

While money can be a difficult and even painful subject, it doesn’t have to be. Learning to carefully manage your money early is key to handling your finances without significant stress. Follow these three steps to gain strides on the path to financial security.

By-line:

Mariana Ashley is a freelance writer who particularly enjoys writing about accredited online colleges. She loves receiving reader feedback, which can be directed to mariana.ashley031 @gmail.com.

This old Growing Money Blog post about how people hide their money at home inspired me to write an article about how people can use the coins they keep at home to benefit them in some way. I personally make use of an enormous glass coin jug in which I toss all my spare change when I get home for the day. So I wanted to write a post for everyone about how this jar has really helped me manage my money; when I cashed it in the last time, I had around $150! I used
that money to help pay off some of the costs of a trip to London later that year.

So, if you don’t already use a coin jar at home, you should try it out and see if you like it. They have lots of uses, and it can make keeping change fun, especially if you have a family. All you have to do is really commit to putting all of your spare change in the jar, no exceptions!

Here are a few ways a coin jar can be useful to your finances.

Pay the Bills

One way to use the coin jar is as a way to help yourself pay the bills. When you finally cash in the coin jar, after however long it takes you to fill it up, you should use the money to help pay off one outstanding bill. This could be especially good if you have credit card debt, as the coin jar could help to pay that off. Of course, you have to wait a while before you cash it in, so you wouldn’t be able to rely on it alone. Instead, it would just be a temporary and unexpected form
of debt-relief. Essentially, the coin jar gives you one free pass at helping pay off a bill. It’s a nice little break for your finances.

Treat Yourself

Another great use of the jar is as a treat jar. Before you put any coins in it, establish what you’ll use the cash for once it’s full. In my case, I used it for my trip to London, but you could use it for anything at all: a new phone or a nice dinner, for example. The great thing about using it as a treat jar is it gives you something to look forward to and also it encourages you to use your money wisely. Basically, any money not put in the treat jar cannot be used for treats. You can only use spare change for the treat jar, and you cannot take the change out until the very end. This can help you better manage how you spend your money.

Give to Charity

Finally, you can set up the jar as a kind of charity collection plate. Pick a charity to which you would like to donate the cash once the jar is full, and every time you have changes drop the change in the jar. Make sure you pick a charity that is close to your heart, as this will inspire you to constantly put change in the jar rather than let a few quarters go towards a soda. Donating to charity organizations is a great way to learn financial humility and teach you about your own financial priorities.

This guest contribution was submitted by Jamie Davis, who specializes in writing about masters degree. Questions and comments can be sent to: davis.jamie17@gmail.com.