BY: Chris Thornton
Even though you may make a good amount of money or have a lot of money saved up there's always plenty of more ways to increase your earnings and your savings. A great number of employed people spend about 80% of their income on their bills such as their car note, mortgage/rent, water, gas, etc. because they don't plan their expenses properly. Once you are aware of your income you then need to plan your expenses accordingly, using about 50% of your earnings. While you are saving about 25% of the other 50%, the remaining 25% needs to be put to use such as investing in stocks bonds or any opportunity that comes your way. Another word for this would be making a budget, making a plan of exactly how much you have to spend, how much you don't need to touch at all, and how much are you willing to lose for your investment. Credit cards are a great way to build your credit score but their also a horrible way to end up in a lot of debt. When working a 9-5 job 5 days out the week its a little easier to keep up with your credit card expenses but as a business owner it can be hard to keep track of when you have to make purchases for your business with your credit card. When you first get a credit card don't be in a rush to sign up for exactly what they tell you too. Don't be afraid to ask what is the minimum limit you can place on your card, its always best to start off small, for example; if you put a $100 limit on your credit card you know you will earn enough money to pay your bill every month. Since you can't use but $100 you'll be increasing your credit while staying out of the way of the jaws of debt. Also when choosing a credit card make sure you know the interest rates behind the card because the higher the interest rate the more money you will owe the credit card companies, and if you have trouble paying them, the more debt you will be in.
I completely agree with you Mr. Thorton, because like you said, so many people spend the majority of their money on bills, car notes, mortgage, and other things of that sort, that once all these payments are made you have very little money left for yourself. The most important thing is what Mr. Thorton states early in his post. He said the best way to make the most of your money is to know how much you'll receive each pay check and then plan accordingly on how you should spend money. Another tip for better managing money is to create a savings account where your money can stay in a safe place while still drawing interest every few months. Building credit using a credit card is a great way to manage money as well. I currently have a student credit card through Wells Fargo, and have been spending money and making payments on it since my freshman year. By doing this, I have really boosted my credit score, and I am also getting a chance to start building my credit now instead of having to wait years later.
ReplyDeleteI think the youtube video had some really good tips on money management, especially with the notion of paying yourself before you pay your bills so that you can build up an emergency, so to speak. Also, Mr Thorton's last tip about practicing delayed gratification was extremely important because if one spends what they earn as soon as they earn it, they'll end up in a rough situation financially. Good post man!
ReplyDeleteThank you for the blog post, I always enjoy reading about financial well being. I agree, we do live in a generation that wants instant gratification and spends beyond our means, often leading to a life buried in debt. What helps me manage my money is staying true to my values and focusing only on necessities. I make a good habit of spending money on things of worth to me like short vacations and being frugal with everything else. For example, I always find some sort of deal for any occasion regardless of where. I usually plan out where I want to go because spontaneity can result in excessive spending. Please take a look at this blog that I follow as it really has changed my perspective on money, but most importantly it gives real life accounts and examples of how to live a happy life without worrying about money. http://www.mrmoneymustache.com/
ReplyDeleteI think this was a really good blog post, especially the idea of saving money by putting money aside, or paying yourself so you can have money for other important things. I remember us in class doing an assignment and a class on Delayed Gratification, instead of instant gratification. Accounting also plays a role in this too, if you know about the Accounting Equation, you know that Assets=Liabilities - your Equity
ReplyDeleteThis is a great post. I find the post very informative because it teaches my peers and I that we have to be mindful of the things we set ourselves up with in regards to credit cards. I must say that I have fallen into a few credit card scandals and after reading this post i realized that it's better that I reel the benefits by waiting versus trying to get what I can on moneyes I don't have to give back.
ReplyDeleteI certainly support the notion of delayed gratification; it is an important factor in leveraging an individual's prosperity in the future, especially in regard to his or her financial stability. Practicing immediate gratification will momentarily satisfy a person's wants but will seldom help a person to achieve his or her needs.
ReplyDeleteHey this post is very relative and convenient for college students-- me in particular. I am now in the process of making some financial decisions such as: if I should get an secured credit card or the normal type, if I should continue saving my money, or use them for investments, and if I should raise or decrease the amount of money I'm saving. With that said thank you sir for the helpful tips and financial resources.
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