Managing Money

-
If I could leave any single lesson with my children it would be that life is not about them. God comes first.


If I could leave them with a second lesson it would be about MANAGING MONEY.

Yahoo Finance has five good rules on handling finances. Even though the article is aimed at recent graduates, the lessons apply to everyone. Here's the summary.

1. Money doesn't grow on trees. Most people never learn to manage money. That's a critical skill.
2. Live within your means. If you can't afford it, skip it.
3. Pay off student loans. Debt is bad.
4. Stay away from retirement cash. At least put as much into retirement as your employer will match. If they don't do a matching funds, put some in an IRA and leave it alone.
5. Be wise with credit cards. Debt is bad.

I think that's a bit complicated.

Financial security can be summed up much simpler, as I did previously in my post Finances and You : Spend Less than you Make. The problem is that you think "Oh, I make $20,000 a year" and so feel free to spend $20,000. That will simply lead to trouble.

I prefer the less ambiguous post I called The One $ Rule: Only buy if you have cash. Yeah - on hand. Not coming in next month or in the next year. If you're wondering how many paychecks it will take to buy that flat-screen TV, well, that's how many paychecks you need to wait to buy it!


If you only buy when you have cash, the rest takes care of itself.


Shakespeare even said it in Hamlet, Act 1, Scene 3 where Polonius is giving his son advice.
Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.

Comments

  1. ElizabethMay 16, 2014 at 4:53 PM

    But father dear, sometimes Shakespeare didn't particularly like Polonius. He says things like "brevity is the soul of wit" after talking for about three pages. ;) Not saying the advice is bad, just saying that Polonius is a bit of an odd duck there.

    ReplyDelete

Post a Comment

Popular posts from this blog

Why I cancelled The Bauman Letter

-
Image
I signed up for The Bauman Letter, edited by Ted Bauman and read it for a few months. His father is a well-known member of The Sovereign Society and Ted contributed for years. I like Ted's writing style and read his letter for the nuggets of information I could glean. One month he recommended a company in Australia for holding my gold. If I had a hundred grand in gold, maybe I'd go that route. Then again, maybe I'd bury it in the back yard like the old Romans. I cancelled his newsletter after reading his October issue. Ted posted ten pages of glowing prose for the 1291 Group of the Americas . I was impressed by his report and thought this might be a company I could park my IRA with and not worry about it. (We've been burned by local investment advisors who lost large chunks of our investment and still took their overly fair share of fees, so we're hyper-cautious.) Ted especially praised Erika Nolan, the CEO of this prestigious firm. Ted forgot to menti...
Read more

FBAR Scam, but not illegal

-
Image
FBAR (not to be confused with FUBAR, but the one can lead to the other) is a government required Foreign Bank Account Reporting that you must file if you have one or more foreign bank accounts that total more than $10,000 in assets. It is another of the methods the USA uses to track illegal drug trafficking money. I won't comment on how effective it all is, but there is a sort-of scam you need to be aware of. Yeah, you didn't want to read all that. Here's the scam. If you google FBAR, the very first link reads: Fbar Filing - FinCEN Foreign Bank Accounts Form - eFileFBAR.com and links to www.efilefbar.com. Don't click it! It's a legitimate link and they ask you all the correct FBAR questions. When you finish, they want you to pay them $350 to file for you ! Go to the FREE Government Link The government web site asks exactly the same questions, in exactly the same order and then lets you file for  FREE  with the USA. So what the "efilefbar...
Read more

Grandma

-
Image
Mom would have been 78 this year. Happy Birthday, Mom. When our cousins laughed and told my youngest brother that Grandma Jen wasn't our Grandma he just smiled and walked away. "She's my Grandma," he said. When they told me, I was irate. I was eight years older than my youngest brother, and I knew it wasn't possible for Grandma to be my cousins' great Aunt. I also hate being confused and I knew Grandma Jen was our Grandma. In a family tree Grandma Jen was our great Aunt, our real grandmother's younger sister. We have very little information on our grandmother. Elva Gertrude Elston was born in Sanilac County, Brown City, Michigan in 1915. She left the farm and her family and moved to the big city of Detroit when she was eighteen. According to relatives she never used the name Elva, but went by the name Peggy. She was very beautiful. My Aunt Ida (Peggy's youngest surviving sister) told me that Peggy came home to the farm for a few weeks duri...
Read more