It’s easy to conclude that paying proper attention to the vast and diverse array of matters affecting your personal finances should be a full-time job. But I hope you have found that personal financial planning isn’t really that complicated, despite the yeoman’s efforts among many in the financial services industry to make you believe otherwise. All it takes is some discipline and a little time.
If successful financial planning can be boiled down to two words, they are common sense. If you think back on the less-than-stellar moves you have made with your money in the past, and no one is immune from these transgressions, you will no doubt find that your money calamities were caused by lapses of common sense on your part or on the part of someone who is advising you and who may have a different agenda than improving your financial wellbeing or lacks the skill and experience to advise you skillfully.
When you were a young adult, your parents probably cautioned you to think carefully before doing something risky in your life. These discussions could have covered a lot of temptations, including credit card loans – admittedly ranking way down the list of risky activities. Here’s what they were saying: A short-term money dalliance takes a heck of a lot longer to correct than it did to get into the predicament in the first place.
It takes a lot less time and effort to make the right moves with your money than it does to undo any wrong moves.
Smart Money Tips
- Total market index funds to the rescue. It’s easy to get confused about all the investment options that are available to you, and it is very important to avoid making mistakes in these uncertain times. But there are ways to participate in the stock and bond markets without having to earn a doctoral degree in finance. For example, you could invest in a total stock market index fund or exchange-traded fund. In this single investment you would own large company, mid-sized company, and small-company stocks. Similarly, a total bond index fund or exchange-traded fund would allow you to participate in a broad array of government and corporate bonds. Index funds and exchange-traded funds usually assess very low expenses, which is the icing on the cake.
- Help younger generation family members prepare for retirement. One of the best ways to teach children, grandchildren, nieces, and nephews about the importance of saving for retirement and investing is to help them fund their retirement plans. Anyone who has job income, even from summer or part time jobs (allowances don’t count), can contribute to an IRA, including minors. Once a younger generation family member gets a “real job,” you might be able to afford to help him or her contribute to a retirement savings plan at work. We know this is a good investment for the youngster. But it may also be a good investment for you insofar as the sooner you can teach younger generation family members about financial responsibility, the better the chance of your not having to support them financially later.
Food for Thought
If you would be wealthy, think of saving as well as getting.
-Benjamin Franklin
Money Can Be Funny
Money is not the most important thing in the world. Love is. Fortunately, I love money.
–Jackie Mason
Word of the Week
oniomania – noun – (o-nee-uh-MAY-nee-uh) – an uncontrollable urge to buy something; compulsive shopping.
Origin: From Greek xnios (for sale), from onos (price) + -mania.
Oniomania consumes our household whenever the online retailers announce their fall sales events.