If you’ve ever been drowning in money problems, you’ve probably heard of Dave Ramsey. He’s a personal finance expert, radio show host, author of numerous best-selling books (like “The Total Money Makeover” and “Financial Peace”). In this YouTube Segment, Dave Ramsey goes over briefly six personal finance principles you should be utilizing each and every day. The first step, of course, is to be cognizant of your spending habits. Start by evaluating your financial status holistically by looking at your income, your expenses (especially unnecessary ones), and your financial goals to get you back on track. By acknowledging and understanding where and what your money is going to, you will be able to gain the necessary reigns in moving forward in saving for your future.
It’s easy to imagine saving money next week, but how about right now? Generally, we want to spend it. Economist Shlomo Benartzi says this is one of the biggest obstacles to saving enough for retirement, and asks: How do we turn this behavioral challenge into a behavioral solution?
Parenting has always been an adventure without a manual. During the course of your children’s lives, you will be expected to teach, raise, and develop your children as the future leaders for tomorrow. While personal finance never becomes a priority between teaching them how to ride a bike or preparing them for college applications, instilling a strong money management mentality and skill for your kids can play a large roll in their lives. This deeper understanding of financial literacy can help your kids make better financial decisions during and after college so you do not need to worry about their future.
Let’s start by first understanding the concept of financial literacy. Financial literacy is the ability to use knowledge and skills to make effective and informed money management decisions. This covers things from the concepts of earning, spending, and saving to the ability of opening a bank account. While these are noble financial skills, knowing these everyday money management notions increases a persons overall financial success. In education today, the system focuses much of their attention on reading, writing, and math. While these core skills are imperative in the growth of our youth, financial literacy, especially as secondary classes, can become a game changer in transforming our children into leaders and forerunners for our society.
It is clear that finance, especially personal finance, is an important topic in all of our lives. But with its importance, why do many adults veer away from the topic when it comes to their kids? Wouldn’t they want to share their knowledge to help get their children on the right path for success? As much as we want to say yes, many adults, however, avoid talking about money because of their own financial struggles and lack of confidence of their own personal finances. While it is understandable why they might be embarrassed, they need to know that they can make that much needed impact in changing the course of their kids. First and foremost, they have the experience and perspective needed to aid their kids to a perfect track record. In addition, they can steer them from any mistakes that they have made in the past. This type of knowledge can absolutely go a long way. Even if you do not know the more higher level practices, introducing and sparking interest and awareness can help empower your children to take control of their financial lives.
To help teach your children about money management, start off by showing them the relationship between earning, spending, and saving. This can be done through a simple weekly allowance. This type of approach will allow your child to gain the overall foundation of the value of money. From there one, especially as they get older, teach them more about a savings account, balancing a checkbook, and creating a personal budget. Some approaches many parents have used is to actually show the their own personal finances at work. The key for this to be affective is to have them try it themselves. Allow them to make the mistakes now, than later when it counts. At the end of the day, we want to give our children the necessary resources to be successful in life. While financial literacy will take time, it will be the biggest impression your children can take away when they get that first paycheck and provide for their family.
When it comes to your future, you can never be too safe. For many people, they believe that they have the ability to manage their own money. While this may be true, it is never troubling to have someone there to guide you through the overall process.
In reality, financial advisors do more than just sell you a specific product or service. Instead a quality advisor listens to your financial goals and plans strategically of how to best move forward with your investments. While you many not always need a financial advisor for a long-term commitment, there are definitely specific instances where a quick consultation can be beneficial for your future.
Below, you will find four necessary moments when you should meet with a financial advisor. These meetings will not only clarify any misunderstandings, but also enhance your knowledge of how to best handle your funds.
You should meet with a financial advisor when you… get a new job or role.
Regardless of what field you are in, meeting with a financial advisor after assuming a new role at your company or a new firm is incredibly beneficial in putting your finances in check. Not only can they advise you on how to best begin saving for your retirement, but also they can provide insights on how to maximize your employer’s benefits package. For many businesses, much of these retirement options can be overlooked through the day-to-day training they will start you off on. To help alleviate the information overload, try and spend some time with an expert to break down any benefits that can help aid your financial future. This can also give you a chance to review your personal finances holistically and reevaluate any holes to get you back on track for the future.
You should meet with a financial advisor when you… get married or divorce.
Whether you are getting married or divorced, both instances will drastically change your financial plan in a variety of ways. As much as you can do this yourself, seeking a financial advisor can help alleviate the stress while also aiding you personally and emotionally. Let’s start with divorce. For many people going through this untimely moment, they know that finances, especially any dealing with combined assets, can be taxing and emotional for both parties. Rather than fight with your soon to be ex-spouse, try throwing in an objective financial advisor into the equation. They can help split any shared income or savings evenly and fairly in the most unbiased manner.
In comparison for marriage, you are dealing with an entirely new situation. Utilize your financial advisor to help you plan for your future goals and retirements. Allow them to guide you in reaching any personal goals, while also managing both of your accounts in the best and optimal manner.
You should meet with a financial advisor when you… get an inheritance.
Receiving a large sum of money is never a bad thing. This can come from a large inheritance, company bonus, a big raise, etc. The only mistake you do not want to make is squandering the new funding for frivolous opportunities. To ensure that the money will be used in the most beneficial way, try and talk to an expert. See what new financial options you can leverage to help expand your financial portfolio.
You should meet with a financial advisor when you… want to retire.
Retirement planning is one area, but actually retiring is a huge leap to make in your life. Rather than live with uncertainty, try and meet with a financial advisor of how to best allocate your financial funding so that you can do all of the fun things you planned for your future. They will provide you with a strong and strategic financial budget that will allow you to live the rest of your life with ease and comfort.
In the spirit of ideas worth spreading, TEDx is a program of local, self-organized events that bring people together to share a TED-like experience. At a TEDx event, TEDTalks video and live speakers combine to spark deep discussion and connection in a small group. These local, self-organized events are branded TEDx, where x = independently organized TED event. For this particular Tedx Talks, we have Alexa von Tobel.
Alexa von Tobel is the founder and CEO of LearnVest.com which she has been developing and growing since 2006. LearnVest is the leading personal finance and lifestyle website that brings financial literacy to women. Since launching LearnVest, Alexa has been widely quoted as a personal finance expert and entrepreneur in top tier business and consumer publications including: New York Times, The Wall Street Journal, New York Post, BusinessWeek, Shape, Fast Company, Marie Claire, ForbesWoman, InStyle, People StyleWatch, Time Out New York, The Huffington Post, among many others. Alexa has been included on Vanity Fair’s 2011 Next Establishment list, featured on Business Insider’s 2010 and 2011 Silicon Alley 100 lists, named “One of the Coolest Young Entrepreneurs” in Inc. Magazine’s 30 Under 30 feature, titled a “Woman to Watch” by Forbes and included on the publication’s 30 Under 30 list, highlighted on BusinessWeek’s annual list of “Best Young Tech Entrepreneurs,” among others. LearnVest has been named one of “25 Women-Run Startups to Watch” by Fast Company, included on Forbes’ list of the “Top 100 Websites for Women” for the second year in a row, featured on Business Insider’s Digital 100 list and included on Time Magazine’s annual list of “50 Best Websites.”
In Alexa’s TedTalk, she discusses one of the most pressing issues going on in our nation today, personal finance. For years, the concept of personal finance has not been fully conceptualized or taught in grammar, secondary, or collegiate classes. This ever-evolving problem forces many fresh college graduates to learn the ‘life lessons’ of finance through trial by error. Rather than see this vicious cycle persist year after year, Alexa tries to educate her audience and viewers with five money principles every single person should live by. To learn more about it, please check out the video above.
With May and June right around the corner, many senior college students have eagerly awaited the much-anticipated day that they can finally call themselves college graduates. While that day will always be cherished, it is also a celebratory welcoming into the real world.
Unless you are graduating with a bachelors of science or bachelors of finance degree, you may not have the knowledge or understanding of how to successfully save and invest your money for your future. Many college graduates and young professionals get overly excited about ‘making’ a salary that they oftentimes live beyond their means. While many people, especially their parents, can call this a learning curve, the trend itself has gotten out of hand as it continues to grow dramatically year after year. That being said, I have jotted some financial wisdom of what you should do with that first paycheck. Remember, the uphill battle is find your career. Winning the war is how much you can save in the process.
Start off by picking up a book or two on money basics or finance. While school may be out of session, learning about the foundation of saving can help you tremendously throughout the years. One of the best selling books to help aid you in your process is, Get a Financial Life: Personal Finance in your 20s and 30s by Beth Kobliner. In this book, Kobliner provides her readers with a substantial guide of money, business, and finance. She teaches you various tricks for becoming a master of your financial future regardless of what happens in the economy.
Once you have studied up, pencil out a budget. I have written countless blogs about creating a personal budget on my career site and professional site. The reason why is because of how important a monthly budget can do for your financial future. The goal comes down to this simple question: How much money are you making, spending, and saving each month? To answer this, you need to map out your budget in a holistic and calculated way. Even for unknown values such as food or social outings, you can always estimate. The main expenses to hit are of course the essentials such as your rent, utilities, groceries, transportation, any student loans, and car loans. Once that is calculated draft up a rough estimate of your social expenses such as a gym membership or any extra curricular activities. Once that number is calculated, subtract that from your revenue (monthly salary) to get your savings. This figure gives you the opportunity to see what you can save or spend each and every month.
Now when it comes to expenses, be realistic. I have heard countless times of millennials finding lavish apartments in New York City or San Francisco. Unless you are making a cool six-figure salary out of college (something that does not happen to often), living within your means will play a large role for your financial future. Make sure to cut your expenses as much as possible. At the end of the day, these expenses will play a large role in what your overall lifestyle can be
Speaking of expenses, try and lower your debt as much as possible. Whether they are student loans or credit card expenses, you want to make sure you are able to cut down that number as much as possible. One thing you should not do is to think of your debt as a monthly bill. That type of mentality will only make you cavalier about paying it off. If there is any way for you to reduce it, do it! It will pay off in the long run.
Last but not least, make it a top priority to set up an emergency fund. The rule of thumb from many financial advisers is to try and set aside the equivalent of three to six months worth of living expenses. The reason why is that we cannot predict our future. Certain things can happen along the way and we want to make sure we can handle them accordingly. Yes, it may be difficult, but this is the start for something greater.