I’ve spent time in prior blog posts writing about the value of a degree in finance. Understanding how money works is essential for so many careers today. It is also essential for us individually.
As the year nears its end and some of us think about resolutions, here are some steps we all can take to help understand, manage, and enjoy our financial futures.
1. Check your credit reports. A trusted site to start is the Federal Trade Commission website. So much may depend on your credit, even your auto insurance premiums. Imagine the shock to find out a relative of yours has taken out a credit card in your name and ruined your credit. That is exactly what has happened to a student of mine. She found out when she checked her credit report.
2. Begin a budget (and stick to it). Estimate where you spend your money, and then actually track that spending over a month or three. Assess if those expenses were needs or wants. A budget is the starting point and there are many tools out there to help you. One is www.mint.com
3. Develop your goals. Where do you want to be in five, ten, and twenty years? And, how do your finances fit into those dreams? Look at your budget to determine who you pay for your goals. Be sure to discuss these with your partner. Our financial planner took my wife and me through a dream exercise several years ago and it changed our plans dramatically, in a very positive way.
“You've got to be very careful if you don't know where you are going, because you might not get there.” — Yogi Berra
4. Pay yourself first. As you assess those needs and wants, consider your dreams to be a need and fund those first. For many of us this probably includes funding for retirement. For my wife and me this means saving for our travels. Seeing the world is very important to us and a priority as we save for the future.
5. Look at your debt, and figure out how to pay it off. Debt takes many forms and some may be considered “better” than others. Certainly a home mortgage is quite different from credit card debt. But all debt has the common feature of you owing to others. To a bank, your debt is an asset while your savings is a liability. Which would you rather be?
Do something today to change your financial course. It could be any or all of these steps, but do something. And then do something more tomorrow.
“Do the difficult things while they are easy and do the great things while they are small. A journey of a thousand miles must begin with a single step.” — Lao Tzu
There are other steps you can take, but these are just some ideas to get you started. Perhaps most important, enjoy the journey. This is especially true this time of year.
Johnson & Wales University offers an online Master of Science — Finance degree and a Master of Business Administration — Finance. For more information, complete the "Request Info" form on this page or call 855-JWU-1881.