Personal Finance Ology

So I was taking some time catching up on current events and the top finance news stories when I began to think about the effects a firm knowledge of personal finance issues can have on the future of my generation. The reason I became an advocate for being knowledgeable on personal finances is because I noticed that a lot of people my age just weren’t that interested in learning about their finances. This in turn leads to bad spending habits, unpreparedness for emergencies and a lot of time an extended dependence on their parents for financial assistance. I can go on an on about how this cycle then effects the parents of those uninterested in controlling their finances and how that can later trickle down to the economy, however I am choosing to take a different route.

Rather than rant and rave about the effects, I thought I’d take a look at the causes and by doing this hopefully deter some from making irresponsible financial choices or lackadaisical attempts to learn about their finances. What we don’t realize is what we pay the least attention to is what has a large impact on our lives.

Take for instance myself. During my earlier years in college, I took advantage of all of the offers of credit I was given only to later find myself unable to pay back my debts, which in turn was reflected on my credit report. The negative reports on my credit would later come back to haunt me when I was trying to purchase my first car. However, I didn’t think of that while I was carelessly spending money I didn’t really have. I just think that personal finance should definitely be talked about more in high school and college if not in depth at least to the point where it would peak the interest of students to go out and learn more about it on their own.

I know I’ve talked about this in my other blogs, but making smart decisions is a benefit in all aspects of your life-especially concerning your finances. So I thought I’d offer some areas where you could start making better decisions.

Plan What You Spend - being conscious of the amount of money you make in relation to your overhead will keep you aware of what you can and can not spend and also help you to focus on areas where you can lower expenses and create more spending money.

Use Your Credit Wisely - this means knowing the advantages and disadvantages of credit cards, their rates and their purpose. This also gets into Good Debt vs. Bad debt. I wrote about this in an earlier blog.

Stay Within Your Means - when you do this you make room to increase your means so that you are able to comfortably afford even more luxuries without overextending your finances.

Build An Emergency Fund - when you have an amount of money put aside you don’t have to worry about car trouble or a pricey repair putting you behind on your monthly expenses.

IRA or 401(k) - contributing to one of these accounts prepares you for a comfortable retirement.

Learn More About Investing - gaining more knowledge on investing will help you to increase your finances by having the ability to choose the investments that are right for you. A lot of people shy away from investing thinking they can’t do it however if you learn about it you will find that anyone can use investing to their advantage.

All of these topics, if they haven’t already been discussed, will be discussed in depth throughout this blog so that you can gain full control of your financial future. It all starts with a base. Having a firm knowledge of how personal finances work and what areas to strengthen before you move on to the next is the best way to go. That’s why in this blog I started with the base, the ground floor, of your financial fortress so that you can learn about how everything works together for your benefit. Once you understand how everything works, why you should do certain things in a certain order and how to make the right financial choices that will lead you to the achievement of your financial goals, it makes it that much easier to move along the right path to financial success. Here’s to the desire to learn more about personal finance and the want to make the right financial choices towards financial abundance!

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With all of the stress and worries the downfall of this economy is causing, I thought I’d take a minute to stop and smell the roses. All of the talk about the importance of becoming financially stable made me take a moment and think about the real reasons I wanted to become financially stable.

I understand repairing your credit and having an ample amount of savings for a rainy day (which is an estimated 3 months worth of your overhead according to the experts) is vital and can be a stress reliever, knowing that you have some sort of cushion in case of an emergency, however I feel there’s something more important to financial stability. Therefore, the real question isn’t just “how much money do I need to pay off my debt?”, or “what more do I need to do to fix my credit?”. The most important question is “why do I want more money?”

When you find the answer to that question, you are not only discovering what really makes you happy but you are also providing yourself with the motivation that will make obtaining financial stability that much easier. If you were to use your true happiness as a focal behind all of the hard work you have to put into creating financial stability all you will see is the outcome and not your current situation.

Financial stability to me is more than simply having more money it’s about having the ability to provide financial freedom for yourself and your family that will allow to do the things you enjoy all while doing what you love. If you happen to be in situation where you are not doing what you love then you can focus on just that-being able to do what you love. My point here is that in the event there is some sacrifice on your part your main concern should not be the sacrifice it should be the reward.

Your work and your process towards financial freedom is actually that financial freedom. I’ve figured with all of the stress and worry of what’s going to happen next with the economy, the most important thing is our sanity and our strength. I happen to find my sanity around those I love and find strength in my journey to financial freedom and acquiring the ability to do the things I enjoy most. Without that there really isn’t a life or a purpose. I know we all wish we could just wake up and be Bill Gates or Donald Trump, however the most important thing to remember is that Bill Gates and Donald Trump didn’t just wake up with that net worth. They had to sacrifice and push towards their goals in the face of adversity. The thing to take from their stories is their success. They did it! And you can too!

While I am only ¼ the way to the type of financial freedom I would be satisfied with, I have learned to take my time, learn all I possibly can and follow the detailed map I’ve drawn out for myself all while taking the time to enjoy the process, my family and those along the way. It’s always better when you stop and smell the roses!

Photo by: natural.1

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