Studying can often be a bore. However, almost everyone likes learning about, talking about, dreaming about, and fussing with money. This makes studying finances more fun than other subjects may be. Researching how to increase your financial IQ can be enjoyable and absorbing.
There's a lot of help out there, from radio talk shows, investing advisers, online posts and blogs, how-to-get-rich books, and helpful friends and family. Some reliable sources are very old, like the Bible. Others may be hot off the press, promising a brand-new way to get more money, spend it more wisely, make it work for you, and make it last as long as you (and maybe your heirs) need it.
All of these go into an in-depth understanding of money management. First of all, people need to have money to manage, of course. Whether this comes from a paycheck, a government check, or even an allowance, there are good and poor ways to handle it. Centuries of money manipulation have given us some basic tools.
Almost everyone can work, and there is usually some sort of job out there. These days, income might be from employment, or it might be from government assistance. No matter where it comes from, good management can make it go farther. This is where a budget comes in.
Recurring expenses, or 'fixed' expenses, are things like rent or mortgage payments, car payments, alimony or child support, and utilities. These things can't really be changed. Knowing what percentage of your income goes to this sort of expense is important in understanding the whole picture.
Confusion is usually far worse in the area of 'discretionary spending'. Sometimes income is gone the same day it's received. Your goal should be to know where the money is going and then allocate it in advance, so impulse spending doesn't deplete funds that should go to things like clothing, recreation, or savings.
This surplus should be saved in an emergency fund. It doesn't have to be huge, but even a little comes in handy when, for example, you spill indelible ink all over your work clothes and need to buy new ones. Without savings, you are forced to commit the heinous crime of using credit (gasp.) This is a no-no for the financially savvy, since it increases the cost of everything purchased and adds one more monthly bill to the whole.
Budgeting and saving are at the most elementary level of financial matters. There is a lot more to learning about money. There are tax shelters, investments, and many more ways to create wealth. It's fortunate that the more you learn - always assuming you apply the knowledge - the more fun it gets. Setting goals is another way to foster self-discipline and track achievements; setting a goal, meeting it, and setting another higher one is one of life's quiet thrills. Eventually you will find that you're out of the 'investing for dummies' class and headed for a graduate degree in money management.
There's a lot of help out there, from radio talk shows, investing advisers, online posts and blogs, how-to-get-rich books, and helpful friends and family. Some reliable sources are very old, like the Bible. Others may be hot off the press, promising a brand-new way to get more money, spend it more wisely, make it work for you, and make it last as long as you (and maybe your heirs) need it.
All of these go into an in-depth understanding of money management. First of all, people need to have money to manage, of course. Whether this comes from a paycheck, a government check, or even an allowance, there are good and poor ways to handle it. Centuries of money manipulation have given us some basic tools.
Almost everyone can work, and there is usually some sort of job out there. These days, income might be from employment, or it might be from government assistance. No matter where it comes from, good management can make it go farther. This is where a budget comes in.
Recurring expenses, or 'fixed' expenses, are things like rent or mortgage payments, car payments, alimony or child support, and utilities. These things can't really be changed. Knowing what percentage of your income goes to this sort of expense is important in understanding the whole picture.
Confusion is usually far worse in the area of 'discretionary spending'. Sometimes income is gone the same day it's received. Your goal should be to know where the money is going and then allocate it in advance, so impulse spending doesn't deplete funds that should go to things like clothing, recreation, or savings.
This surplus should be saved in an emergency fund. It doesn't have to be huge, but even a little comes in handy when, for example, you spill indelible ink all over your work clothes and need to buy new ones. Without savings, you are forced to commit the heinous crime of using credit (gasp.) This is a no-no for the financially savvy, since it increases the cost of everything purchased and adds one more monthly bill to the whole.
Budgeting and saving are at the most elementary level of financial matters. There is a lot more to learning about money. There are tax shelters, investments, and many more ways to create wealth. It's fortunate that the more you learn - always assuming you apply the knowledge - the more fun it gets. Setting goals is another way to foster self-discipline and track achievements; setting a goal, meeting it, and setting another higher one is one of life's quiet thrills. Eventually you will find that you're out of the 'investing for dummies' class and headed for a graduate degree in money management.
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