How Are You Going to Master Your Money in 2009?
January 23, 2009
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How do you manage your money? Do you create budgets and stick to them? Do you track your spending’s with money management software or a notebook? Do you use online banking? Maybe you’re just good at avoiding the pressure to spend from your peers. GetRichSlowly has a write-up on how to take control of your money in 2009, but if you’re like me, you’ll probably want to make sure your financial management is in control for your entire life.
Below are my first five rules on savings from Following The Goods: Financial Management for the Young and Ambitious.
Start saving money early — the best way to start saving is to start early. If you haven’t started early, start now! If you put away $10 dollars a week when you are 15 years old, and invest that money in a low-risk investment, by the time you turn 35 you’ll have earned almost $40,000. The sooner you save, the more you can save. It’s never too late to start saving. Don’t think about what you should have done, or about opportunities you may have lost out on, think about the future, and start saving now to make your dreams come true.
Create financial goals and meet them — it’s hard to accomplish anything in life without a goal, and savings are no different. Constantly set financial goals and do what’s necessary to meet them.
Pay yourself first — as we discussed at the beginning of this chapter, if you don’t pay yourself first, you’ll have problems paying yourself at all. Even if you can pay yourself $10 a month, make sure you pay yourself before you pay your bills, then take the money and invest it wisely.
Use automatic banking — If you are finding it hard to put savings away each month, set up an automatic savings plan where you automatically transfer money out of your account into a special savings account each month. Additionally, by using automatic transactions, you can make sure your bills are paid on time and that you pay yourself first.
Budget, budget, budget — to achieve any goal in life, you need a plan. By creating and adhering to a budget, you’ll make sure to meet all your financial goals. Just like anything in life, your financial goals and budgets can (and probably will) change, so make sure you are able to track your budget and update it when necessary
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Adam Goodman is the author of Following The Goods Financial Management for the Young and Ambitious. Throughout his life, Adam never took ownership of his financial knowledge and no one ever sat down with him to explain what it meant to plan for his financial future. Luckily, while at business school, Adam finally learned how to be smart about financial management and he is here to share what he has learned along his journey with you.
Adam's past experience includes owning and operating his own consulting firm, as well as working as a Consultant with Deloitte & Touche. Adam is currently in a sales and marketing role in the telecom industry.
I think you brought up some great points here. On my site, I advocate finding money within your current budget to “pay yourself” If you made coffee at home rather than buying it at the local coffee shop, “pay yourself” that $4 straight in to your savings account. Read my article to read the rest.
Hey Tim,
If you create a budget, and don’t have enough income to pay yourself first, it’s definitely a good idea to revise your budget and cut out some of those “frivolous” purchases. As an example, eating out every once in a while is fun, but eating out every night can be very expensive.
Thanks for the comment, and keep them coming!