It has been less than 7 years since people were terrified to use their credit cards to make purchases online. Now people are divulging there credit card information for the fun it. While I can see the benefit in sharing your information with sites like mint and yodlee which helps many people, I can not see any good in sharing your sensitive information with site like these. I will be the first to say that sharing personal financial information will shape up to be a dangerous trend if more sites like this start to pop up. I am sure that they are doing their best to protect your information, but why take the risk? Credit is not something you can clear up over night, it take years to fix even the smallest mistakes.

The world wide web only have a handful of original sites and the other umpteen billion are just copies, so I am sure there will be at least a few more sites like this in the future. Don’t get me wrong, I’m all for technology, but it has to have a purpose. As far as I can tell, this site is just for you to show off to your friends and complete strangers. Well, I hope that I am wrong about this trend thing, but only time can tell.

I try to give the best advice on debt and managing your money on this site and your financial information should be kept on a need to know basis. Identity theft is a real problem and destroys lives on a daily basis. The risk is far too great, just be giving out such sensitive financial information willy-nilly (Always wanted to use that in a article). That is my opinion anyway, maybe you guys see it in a different light.

When planning for retirement, you will have a lot to take into consideration. One of the best and most involved resources you have is your 401(k). It is hands down the most generous retirement invest out there, but all the benefits it has to offers will only pay off if you are proactive and make smart investments. Unlike pensions or social security, where you just have to show up to work to reap the benefits, 401(k) retirement plans give you more control and more responsibilities.

Making the right investments is the key to getting a generous return from your 401(k)retirement plan when it is time for you to retire. While you might think the best thing to do is to pour your investments in the company you work for, but most experts advise against it. In fact, investing a large part your funds in any single company is never an good idea. Any good long term investment portfolio is spread out across many stable companies in different industries. That way if one company or an entire industry fails you only lose a fraction of your investments and as the recent recession made clear, it’s not impossible for any company to fail.

As far as what companies you should invest in, that is left completely up to you. Not even the company you work for will tell you where you should invest your money. If you don’t have time to learn how to invest in your 401(k), the best thing you can do is hire a personal financial planner. They can help you to chose the right type of investments to make, help you track , and make adjustments to reach your retirement goals. If you do have the time and want to learn, I recommend you read 401(K) Take Charge Of Your Future by Eric Schurenberg it is a good book to get you started. It is impossible for me to cover all your options in this article, but I will be writing many articles covering retirement planning, check the investing section of this site for more information.

Well, it is time to write another book review. Since I just finished reading On My Own Two Feet by Manisha Thakor and Sharon Kedar, it only make sense that this book is the subject of my review. Yes, I am aware that it was written for the fairer sex, but I wanted to take a quick look into how women think about finance. What better way than to read a book written by females for females?

This book is a quick, smart read and that is important because it is geared towards women with careers and social lives. It gives them a fast informative look at how to make their money work best for them. The message is super clear and to the point. Amazingly the duo covers all the basics of saving, investing, retiring, understanding and using credit wisely, budgeting, and still find room to give a life strategy in less than 200 pages. I like the chapter on prioritizing your financial plan, where they lay out their seven step process to reaching your financial goals. Their seven steps are all great gems that are cut to perfection. I know I am giving this book a lot of praise, but it is really a good book.

On My Own Two Feet is another 5 star financial book in my opinion. It is a must read for ever one, not just women. Get it at Amazon

I know one of the hardest part of starting anything is knowing where to start. I’ve laid out some steps to show you what your financial plans should look like and where is the best place to start. I am making the assumption that you already know how much debt you have, your current credit score and all your other information. If you do not then you should read how to set-up a budget.

OK! here we go:
1)If you have credit card debt, do not charge anything else on your cards and continue making the minimum monthly payments. Your credit score is very important and should be maintained as best you can. Without a good score you will not be able to acquire loans for a car, home or other big ticket items. Paying all your bills on time will ensure your score does not take unnecessary hits.
2)Start writing down everything you spend money on. This will make it easy to track your spending and make cut backs where needed. Remember not to cut out entertainment completely, we are human and we need to have fun.
3)If you have not started an emergency fund as of yet, call your bank and set that up now. Before you pay off any outstanding debts, save at least 3 months worth of living expenses. Before anyone else get there money make sure you have yours. If you start paying off your debts and lose your job, your debts will start increasing again and you will be left without anything type of protection.
4)Once you have 3 months of emergency fund saved, you can start paying off your debts. Take ¾ of the money you were putting into your emergency fund and put towards your lowest debt first and keep putting the other ¼ in your emergency fund. Once that is paid in full go to the net one up and so on…
5)After your debts are paid, start on your retirement fund. Your emergency fund should be close to 6 months or already at 6 months. Put as much as you can in long term savings account such as Roth I.R.A, CD’s or your companies 401K. If you have a company match 401K max that out before you start on the others.
6)By now you should have 6 months of emergency funds saved, your debts paid, and started saving for your retirement. Now you can start saving for big ticket items such as a better car or a home.

As I said before, this is to give you an idea of what your personal finance plan should look like. This is not set in stone and you should use your common sense to make adjustments where you feel they are needed. Take this as a simple guide to get you started. Good luck!

Investing is a scary subject for many, especially young adults. As young adults, we want to enjoy life and saving and investing is usually the last thing on our minds. Ironically, it is the time we should be investing heavily and planning for retirement. A little thing called compound interest can turn $50,000 into over $1.5 million in 30 years time. This is the biggest advantage young adults have when it comes to finances.

Almost any form of long term investments is good for young adults and the amount they have to invest is small compare to older folks. A 25 year old can more than triple their initial investment in 30 years, without adding another dime to it. Imagine if are 25 years old and you invested $20,000 into an account bearing 4 percent interest monthly. In 30 years time you would have somewhere around $65,000 in your account and you don’t have to invest another dollar. Now imagine if you invested another $50 monthly for the next 30 years, that would be somewhere around $100K. Over the 30 years time, you would have only added $18,000 for a total of $38,000 invested and a profit of $62,000.

The reason more young adults fail to take advantage of this powerful technique, is simple lack of knowledge. They do not know it exist and how powerful it is. We usually learn this later in life and try to play catch-up, but time is something we can never get back. I have said before that personal finance should be a mandatory part of every high school, but it is not. It is left up to parents to teach their children about saving and investing, but most parents know just as much as their child. It is an easy subject to grasp and with extensive resources to help you learn and it is available to all young and old.

I love to read other personal finance blogs. I have a few of my favorites in my IGoogle and try to read every new article that comes in. Sometimes I will come across some very interesting and useful articles that will shine new light on old techniques. While I try to give you the best I can on this site, I also encourage you to read other personal finance blogs. Why? Because no one site can give you all the information that you need.

The subject of personal finance is huge, it covers a vast amount of sub-topics and what you do not get from this site, you may find at Moolanomy or Wisebread. I try to write article that will encourage you to continue on your path with tips that you can incorporate into your lives. Other site have different focus and can teach you different things about personal finance. Take I Will Teach You To Be Rich for example, Ramit is good at helping you save large amounts of money. He can show how to save thousands yearly by following his tips or signing up for his programs. His focus is different from mine and therefore his approach is from another angle.

There are many personal finance blogs out there and they are not created equal. Some are just there to make a quick buck and will post on any topic that will draw the most visitors. Fortunately these are easy to spot. You may not like all the finance blogs you come across, it could be the author, the focus of the blog, or a number of other reasons, just leave and find another one to read. Try not to have more than 4 that you read on a daily basis, because too much reading and no action will lead to little progress, financially. Diversify and get your financial information from different sources.

I have mentioned a few time about how most of us were never taught money management at a young age. So I wanted to talk about teaching your child how to manage their finances. Since I do not have children and hate talking about things I have not experienced first hand, I will point out the importance of teaching them in a different way.

The reason Americans are so bad with money is not because we can’t save, It is because of two things…

1) our parents never taught us how.

2) There are a million things to spend money on.

The fact that our parents never taught us money management, only shows that they did not learn it themselves. Once you learn the benefits of personal financial management, not passing it on to your children should not be an option. As a parent you should want your kids to be successful in life and being independent is a sign of success. It does not matter how much they end up earning for a living, if they know how to manage it, they can live very comfortable and stay out of the number one pitfall in America…DEBT! Just think of all the time you said to yourself “If I only knew”. Well, now you do and have a chance to break the cycle.

We all depend on money in one way or another, some of us use it to better our lives and some of us get used by it. Some of us work hard for it and some of us put it to work for us. By social standards the ones that use it to better their lives and put it to work for them are the successful ones. It becomes very easy to make your money work for you if you understand how money works. If at age 20 you knew the basics of saving and planning for retirement, it is most likely that you would have started saving for it then. Worst case scenario, when it come time to retire you would have enough to live of the interest. Best case scenario you would have an island next to Angelina Jolie with a private jet to swoop you anywhere you want to go.

The second reason we do not manage money well, is there are so many companies trying to get it out of our pockets. These companies have the best advertising minds and years of research working to get us spending. I have nothing against buying what you want and need but, there are ways to get everything we want. The problems is, we do not want to wait or save for these things. Children’s minds are copy machines, they usually end up doing what they see us do and continue that pattern all their lives. There financial future depends on what they learn from a young age. I was taught by my mother at a young age how to manage my money and because of this, I have always been good at saving and spending. If she did not take the time to teach me, it is a good chance I would not have the skills and patients that I have today.

My rule in life is the save for everything over $10 and before I had a handle on it, I had what I called a $10 sub-savings account. I would keep it at $100 and when I used any of it I would replace it $10 at a time. It is little things like these that I will teach my kids when I am lucky enough to have some. If you do not have good financial habits, start developing some now and teach them to you young ones as you learn them.

I think I went on long enough this post, I hope you got the point and take actions to make it work for you.

For some reason families do not like to talk to each other about finances. Your spouse should be your right hand, be able to handle all that needs handling, and should know as much as you about the families finances. Just think of some of the problems that could be avoided if your spouse knew exactly what financial problems your family was facing. According to a survey by Fidelity Investments, 60% of married couples between the ages of 45 and 70 say newly weds should discuss daily financial decisions.

Money issues are a big problem between couples, it cause arguments and in some cases divorce. I have never been married, so I cannot even begin to talk about why this is a fact. What I can discuss is the benefits of avoiding these pitfalls and why it is important to teach your spouse how to manage your personal finances.

I realize that not all relationships are created equal. One person might have more debt than the other, one might have a large amount, both might have close to the same financial situation, or a million other possibilities. No matter the situation, being on the same page with your partner is crucial when it comes to money matters. Understanding how you each hand money will help with future financial planning such as budgets, shopping, and saving. If you know your partner has a weakness when it comes to shoes or an affinity for electronics then that can be worked into your budget.

When times get hard and cut backs have to be made, your spouse should know and understand why this is happening. If you are the only one making these cuts and your spouse is still spending as if nothing has changed then your efforts are futile. When It’s time for retirement, if you and your partner do not have a solid plan your retirement could be put on hold and this could cause unwanted problems. Knowing each others debt and devising a plan to pay it off should be a major part of your future financial planning.

Many couples get in arguments and break up every year because of the lack of communication about money. If you do not share and teach each other about finances then you can not help each other when the time comes. According to Smartmoney.com debt was the #1 reason couples fight when it came to finance. Fact is, this can all be avoided and considering whats at stake should be enough for you to take action.

You probably found this page looking for an entry level finance job. Well, sorry this is not about finance positions, but this is still something you need to read no matter what your employment status. Personal finance is a subject everyone should strive to gain as much knowledge and practice in as they possible can. I know people making six figure incomes with little knowledge of money management that are in no better situation than my friends earning little over $30,000 yearly. You cannot tell by looking at them and their expensive cars and home, but their accumulated wealth is not enough to sustain their lifestyle for a full year. With their 5 bedrooms 4 bath homes in up scale neighborhoods comes a hefty mortgage payment due monthly like everyone else. So take the time to learn as much as you can about personal finance and when you get that entry level finance position you will know just how to make your money work for you.

Truth is, the amount of money you earn does not indicate your true status in life. People with high income usually have high expenses from all the thing they buy and people with low income usually have high expenses from buying what they see the broke rich people with. They do not realize that many of these people are struggling themselves. What does indicate how well off you are in life financially is the amount you have invested and saved. A Lamborghini cost much more to fix, use much more gas, burn-out tires much faster, and needs a garage is a safer community than a Ford. Most people will not know its a Rolex until you tell them, they will not know your suite cost $4,000 by looking at it and will not care that your draws are made from chinchilla fur. On top of all that everything I’ve mentioned above are extremely horrible investments and shows how bad high earners can be with their money.

Making long term investments early and learning to manage your money is one of the best things you can do for your future. It is a fact that people that practice financial management are least likely to be in debt and most likely to gain financial freedom. If you take a look at the many Personal financial blogs on the web you would see how many of these bloggers are making great progress in becoming debt free. What they have realized is that accumulated wealth is the key to their future, not the most expensive car or the biggest house in and expensive house in an up scale neighborhood.

Many believe that more income will be the answer their problems, but in most cases it is a lack of management and the unwillingness to Change that is to problem. If you keep doing the same things you will continue to have the same results. I think I have spent enough of my time telling you why you need to make your life better, the rest is up to you. If you need more convincing just ask yourself this. Are you becoming Rich?

]]> http://www.jinij.com/entry-level-finance/feed/ 6 http://www.jinij.com/personal-finance-for-dummies/ http://www.jinij.com/personal-finance-for-dummies/#comments Fri, 18 Sep 2009 00:37:45 +0000 J.Scott http://www.jinij.com/?p=170

I was once a financial dummy myself, the first time my Mom told be about CD’s I told her “they will eventually change to something new like how they changed from cassette tapes so, I don’t think it would be a wise long term investment.” Now I can laugh about it, but I was very serious when I said it back then. Now I have gained enough knowledge and wisdom in the ways of personal finances that I can help you to become knowledgeable as well. If you have no clue what a CD is then you should consider yourselves personal finance dummies and pay close attention to what you are about to read. Personal finance for dummies is also a book that you should consider reading. It is designed for the beginner and has a wealth of information for those new to the subject.

If you are really interested in learning Personal financial management, the best place to start is in your kitchen. The millionaire next door is an excellent book that points out how self made millionaires spend many hours preparing and fine tuning their budgets. They cut coupons, pay their bills and plan their investments sitting right at the kitchen table. I suggest you gather all your bills, income, investments, pile them on the table and get them sorted and organized. I truly believe being organized is the first step to anything you do in life, it sets the foundation for planning and executing your goals. In the Personal finance for dummies book by Eric Tyson mentioned above and in almost every self help book I have read, the author outlines what prevents us from being successful and always in one way or another organization is mentioned. It is a skill you must learn in my opinion and in fact it should be a skill learned from a young age.

You have to remember that managing your personal finances will be a life long process and even though your situation seems urgent you should take it slow. Once you learn and start to implement these skills you will start to see money in a different light. It can become addictive in a good way making you want to learn more and try more. Learning the basic such as organization and budgeting is fundamental. Changing the way you handle your mail by developing a system that easily lets you know what needs to be paid, what has been paid, and what needs special attention is a great place to start making changes. One of my goals on this blog is to help you stay motivated after you have read books like Personal Finance for dummies. Motivation is a very fleeting thing, it takes constant refueling and even with the best of care it will fade.

I will continue this another time as it is getting late and I have a very busy day a head of me tomorrow. It is the opening day for my new company and I have much to do. Wish me luck!

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