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5 Finance Dos and Don’ts

It’s important to make smart financial decisions. Unfortunately, there are many myths about what constitutes financial intelligence. If you want to make more money or save more of what you’re already making, here are five tips to help make a more secure future for you and your family.

1. DO- Have an Automated Savings Plan

If your job offers a retirement fund, pay into it, often employers have a “match” policy. If your employer is willing to pay you to encourage saving you should definitely grab all the free money you can get.

Establish savings accounts for your retirement, your children’s education, emergencies, etc. Once you have accounts established, make sure you add to them every month, before spending on less necessary wants. You should set up automatic transfers to these accounts. So, whenever you get paid, you don’t even have to think about it, it’s all done for you!

2. DON’T- Consider a Side Job Beneath You

Finding it difficult to make ends meet? Often we think certain jobs are “beneath us” such as waiting tables or working at a car wash. But often you will find students working on graduate degrees in these positions. And sometimes they can be a “stepping stone” to something else. They can be good experience or an opportunity to meet someone who will benefit your life in some way (not necessarily just financially).

Find a part-time job, or one that you can do from home. These days, there are many opportunities to make a little extra on the side, without having to work too hard. If you enjoy talking to people, consider babysitting or engaging in a reputable reselling program. Multi-level marketing often gets a bad rap, but if you just want to make a little extra each month, they can be a godsend! Companies like ACN, Avon, Cutco, Pampered Chef, Plexus, Young Living, or Beach Body may be a good fit for you. You may even be able to convert a hobby into a money making venture…  and who knows it could lead to an enjoyable full-time business.

3. DO- Distinguish Between Wants and Needs

Sometimes it’s hard to distinguish between what we want and what we actually need. You need to eat, but you want to go out for meals (which costs considerably more than cooking at home). Similarly, you need to stay active and healthy, but you want a fancy gym membership. Sit down with a budget and plan out how much it costs to take care of basic needs. Add the amount you want to put into savings. Whatever is left over can be earmarked for the things you want. If it isn’t as much as you’d like, revisit tip number two!

4. DON’T- Make Just the Minimum Payments

If you have several lines of credit or loans you’re paying off, it can be tempting to just pay the minimum balance due and forget about it until next month. In the long run, however, you’ll save a lot more money if you pay even a little more each month. Not only will you save, but you’ll pay off the debt much faster as you’ll accrue a lot less interest. Can you forgo a couple meals out or movie tickets each month in order to reach financial freedom a little faster? If not, can you do a little work on the side? These are both much smarter financial decisions.

5. DO- Teach Your Children How to Handle Money

Finance Do's and Don'tsOne of the best things you can do for your children is to instill good financial habits in them. By giving them their own money to handle and explaining that they can spend it now or save it up for something big later, you are teaching them one of the best lessons in life. After all, habits formed in childhood are some of the most enduring throughout life.

Allowance or Chores?

There is some debate about whether children’s money should come in the form of an allowance (a set amount each week) or chore based. (The worst choice is to simply give them money whenever they ask for it because they learn that money is in unlimited supply and just appears whenever you need it. So they aren’t learning how to handle it responsibly.) Personally, I prefer the chore based argument because then in addition to learning how to handle money, they also learn that they have to work to get money and don’t feel “entitled” simply because they exist.

Planning for the future while also enjoying the present isn’t always easy, but by learning to make more intelligent decisions with your finances, you’ll see how rewarding it can be. Not everything can be fixed overnight, but by establishing better spending habits and instilling them in your children as well as trying to earn a little extra on the side, you’ll see a more fulfilling retirement and be prepared should any high-cost emergencies arise.