Studying can often be a bore. However, almost everyone likes learning about, talking about, dreaming about, and fussing with money. This makes studying finances more fun than other subjects may be. Researching how to increase your financial IQ can be enjoyable and absorbing.
There is a lot of information available in books, online articles, radio talk shows, news reports, and counseling sessions with financial advisers. Often the advice is contradictory, which confuses and may discourage a lot of people. However, there are some basic rules that help lay a foundation for future improvement. Some of them are as old as the Bible.
All of these go into an in-depth understanding of money management. First of all, people need to have money to manage, of course. Whether this comes from a paycheck, a government check, or even an allowance, there are good and poor ways to handle it. Centuries of money manipulation have given us some basic tools.
Making a budget is something that most people resist. Often it is simply because the thrill of spending money as fast as it's made is hard to resist. Sometimes people think the process is difficult. Budgeting is simply balancing income with outgo, while breaking finances down into categories. Having a budget - and sticking to it - is the foundation of financial wisdom.
Many people go through life without a clear idea of income and expenses. They have cash flow, they just don't take the time to understand it. This is a serious mistake which can cost thousands over the years. The very first thing is to list expenses that are recurring: rent or mortgage payments, utilities, alimony payments or child support, and such 'fixed' expenses.
After fixed expenses come ones over which you have some control. Food is always a necessity, but you can decide how much to spend and cut corners here by savvy shopping. Clothing, gas for the car, and recreation are other areas where restraint may produce a little surplus. You may think this is impossible - but try it and see.
Everyone should be able to save at least a part of every check. Having an emergency fund means that unexpected purchases - like a new tire for the car or a new blouse after one is ruined by spaghetti stains - won't have to be paid with - gasp - credit. Buying on credit is something most of us need to avoid like the plague, since it makes everything cost more in the end.
Budgeting - a truly valuable skill and one which many resist practically to the poor house door - and saving make the foundation of financial wisdom. Then other things come into play, like investing, saving for a happy retirement, tax shelters, and goal setting. This is when it really gets fun, and your money matters IQ will grow by leaps and bounds.
There is a lot of information available in books, online articles, radio talk shows, news reports, and counseling sessions with financial advisers. Often the advice is contradictory, which confuses and may discourage a lot of people. However, there are some basic rules that help lay a foundation for future improvement. Some of them are as old as the Bible.
All of these go into an in-depth understanding of money management. First of all, people need to have money to manage, of course. Whether this comes from a paycheck, a government check, or even an allowance, there are good and poor ways to handle it. Centuries of money manipulation have given us some basic tools.
Making a budget is something that most people resist. Often it is simply because the thrill of spending money as fast as it's made is hard to resist. Sometimes people think the process is difficult. Budgeting is simply balancing income with outgo, while breaking finances down into categories. Having a budget - and sticking to it - is the foundation of financial wisdom.
Many people go through life without a clear idea of income and expenses. They have cash flow, they just don't take the time to understand it. This is a serious mistake which can cost thousands over the years. The very first thing is to list expenses that are recurring: rent or mortgage payments, utilities, alimony payments or child support, and such 'fixed' expenses.
After fixed expenses come ones over which you have some control. Food is always a necessity, but you can decide how much to spend and cut corners here by savvy shopping. Clothing, gas for the car, and recreation are other areas where restraint may produce a little surplus. You may think this is impossible - but try it and see.
Everyone should be able to save at least a part of every check. Having an emergency fund means that unexpected purchases - like a new tire for the car or a new blouse after one is ruined by spaghetti stains - won't have to be paid with - gasp - credit. Buying on credit is something most of us need to avoid like the plague, since it makes everything cost more in the end.
Budgeting - a truly valuable skill and one which many resist practically to the poor house door - and saving make the foundation of financial wisdom. Then other things come into play, like investing, saving for a happy retirement, tax shelters, and goal setting. This is when it really gets fun, and your money matters IQ will grow by leaps and bounds.
This article collected, selected and written by: Author Van Hoc
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