What are smart money moves?
A smart money move is a tried and true method for creating financial growth and prosperity after education, research, deep thought, mentorship, and experience has guaranteed they will work. Here are some smart money moves for you to begin with, I will discuss:
- Short term smart money moves you can start now.
- Long term smart money moves that will permanently change you
- Understanding the types of smart money moves that will save your financial life
What are the three types of smart money moves that will benefit you?
1A. Short term smart money moves you can start now
It starts with a guerrilla budget. Judging from the way many of you spend money, I can see that you are not close to any budget, much less a guerrilla budget. A guerrilla budget, as defined by me is “your budget on steroids”. You become the master of your money, not advertising, not spoiled kids, not friends who have financial emergencies, not things you don’t need.
It is you, your tracking your spending and getting rid of everything that is not necessary. Sure, after you get your debt and bills under control you can budget in a few things you enjoy, but first you will start with paying your necessary bills with ease, getting your debts low, and creating a system to have emergency money for your emergencies only.
Learn to say the word no. If you can’t afford it, it should not be a part of your spending process. Your short-term financial goals for the new year should include the following.
- Create a budget planner
You know how much money you take home; you know where you are spending on things you can’t afford, so this is where you start.
- Track everything you spend
Sometimes you spend money that we are not aware of because we don’t pay attention to what we are spending on. Create a budget for everything you spend money on.
Maybe you can’t afford a necessary item this month, but if you pay off another item, or save enough money for a new item you need, you can get it in 3 months. Whatever you do, don’t keep charging for things you don’t have money or income for.
- Plan what you need
Write a plan for daily needs, weekly needs, monthly and for the year. Do you plan to return to school in three years? You need a plan for that. The plan should include an affordable public school where student loans are kept to a minimum and the education is an absolute must for your field.
Many people gain access to good paying jobs, without college, by working their way up in a company getting experience as they go. Many jobs will pay for you to take courses to gain knowledge and some will pay for a college degree.
- Plan what you want
Do you really know what you want? Don’t just take a stab in the dark, know what you want based on experience, knowledge, and research. Many folks get useless education or degrees because they did not research the field and understand “exactly” what is involved.
Occupations change over time, what was in demand 20 years ago, may have no demand now. But some people are still getting into fields with student loans and years of study, only to find out they made a huge mistake and there is no demand in that field.
5. Delete what you can do without, and may not want
Make a list of the things you have or are doing. Then make a second list of the things you can do without. From cable tv to going back to school. What is necessary right now? What can I do to make my life more affordable? What can I eliminate to help get out of debt? These are the questions you need to put at the top of your list.
What are long term smart money moves?
2A. Long term smart money moves
If you will ever have enough money, you must learn sane savings techniques, these techniques have been created by me for you. Your long-term financial goals should start with money all over the place. Sounds crazy, but it is possible, no matter what your income. There are many ways with these smart money moves.
- Start with the dollar and coin jar, save regularly here
Get two simple jars, at least a foot high. Every week empty a handful of coins in your coin jar, place at least a few dollars in your dollar jar, between $2 and $10 dollars. This money will accumulate until the jars are full. Don’t use any of the money until the jars are full.
When they are full, you can use them for inexpensive, minor emergencies. But they need to always be half full. When it gets full, take out the coins, redeem them at the store where there is a coin exchange, take the money from the coins and take half the dollars to the bank.
They will be placed in your passbook savings accounts. The remaining dollars will be used for your small emergencies or expenses.
- Don’t be afraid of a basic passbook savings account for emergencies. Yes, I said passbook savings account. This is your first great savings account. Now, I know what you’re thinking. You are thinking, “I am not getting much in the way of interest”.
The interest is not the important issue at this point. The issue is accumulation of funds for short term emergencies’ and long-term smart money moves. This is where we accumulate.
Your short-term smart money moves will be born in your passbook savings account. Everything sprouts from here. Try to put at least $50 to $200 a month in your passbook savings account.
- Use your overage in your basic account every six months to fund a higher interest account as you accumulate money in your passbook savings account, it will be added to pay off bills, purchase short term more expensive emergencies or add to a higher interest savings account.
- Use your passbook account to fund your needs
Write down your immediate short-term money moves as they relate to your needs. An example would be to pay off a $400 credit card balance when I accumulate $600 in my passbook savings account.
- Use your dollar and coin jar to fund your immediate wants
The dollar and coin jar are for super short-term smart money moves as well as to fund your passbook savings account. A super short-term money move would be to fix the cracked screen on my cell phone or hire a gardener to weed and trim your over-grown yard.
3A. Understanding the types of smart money moves that will save your financial life
If you don’t understand the smart money moves of big thing buying you can ruin your finances for a long time, buying cars, homes, and an education.
I talk to people all the time who tell me they wish they would have put more thought into purchasing a car, going back to school or even buying a home. There is never a rush.
Making the wrong decisions when it comes to major items can cost you hundreds of thousands of dollars you could have saved. Remember, you have many choices, and there is never a need to rush. Do your research, do your homework – identify all your options.
- Make “paying off” a car or credit card a goal
I talked to a young girl just a few months ago. She wanted to get her finances in order. I told her you have first start with critical thinking, not allowing advertisers to tell you how to purchase. They recommend high-profit items that benefit their pockets, not yours.
I told her the example of refinancing a car. She, said “STOP”, I already made that mistake. She said she saw an ad to refinance her car for a lower interest rate, she did and then her sister pointed out to her, “do you realize that you just added two years to your car note?”.
She told her, after looking at her paperwork that the two years she had left on her car loan was now four years with her new loan, adding an additional two years. She would have been better off paying a slightly higher interest rate she had and paying off the car in the two years she had remaining.
That was not a smart money move and shows how it happens when you allow propaganda advertising to influence you.
- Use the monthly budget you have from a payoff to save money
When you pay off a bill, you now have extra money, use at least half of that money to place in passbook savings. The other half will be used to put on other bills.
- Do research on a new car if you need it
New cars are expensive especially when you add the first-year warranty service and the cost of general maintenance and vehicle registration. So, look hard for an affordable new car or consider a CPO, or certified pre-owned car. These are cars that you purchase on the used side of a new car lot, they are less than 5 years old, have about a 150-point check and you get a warranty.
- Buying a home is still possible in some states with a middle income, start your research
Homes are getting extremely expensive in the larger more populace states such as California, New York, New Jersey, Washington D.C. as well as others. But there are many states especially in the south and mid-west where you can buy affordable homes if you are middle income. But I caution you to do your research, do your homework first.
- Set a budget for the home you can afford
The most important thing you can do before you think about purchasing a first home or even a second or third, is to set a budget. That budget is based on what you can afford after your down payment, after you have paid off bills, and after you have sold things you don’t need, an example would be a car with a large car payment, may be something you could get rid of.
16. Start a savings account for a home you can afford
After you establish your affordability index, you can now start to save for your new home. I have discussed the many ways to save money above, so you have many ideas. You will need to save for the down payment, the escrow costs, and any repairs that may be needed.
17. Choosing a college; there are no guarantees, research is paramount
Going to college in the United States is tricky these days. The number one goal should be to keep you and your parents out of debt. There are affordable public colleges, consider those first. Private colleges have a lot of hidden cost. For-profit colleges, (that is those that advertise on television constantly and are located online only, or in a strip mall or office building – usually no real college campus, they have quick classes), the cost is high, and the jobs are few. Some employers will not hire from for-profit colleges.
18. Focus on finding an affordable not-for profit college, preferably brick and mortar There are many affordable non-profit public colleges. Do your research be through, keep student loans at no or low, very low.
19. Find great careers that don’t require college
There are many careers that don’t require college and some online course that are very cheap, but have great careers connected to them.
20. Research community college degrees that pay well, computer science, registered nursing, dental hygiene, at a community college you can get a certificate or an associate degree. From that degree you can get a great starting job, depending on the course matter or you can transfer to a 4-year college if your state permits.
The following demonstration shows you that smart money moves can and will put you on tract to great financial growth when you pay attention to the details.
Secure Your Personal Finance Security With These 15 Golden Rules
1. Your employment provides your wealth
Your personal finance security starts with getting the best job possible, and keeping that job is your primary path to wealth. Consistent paychecks over time will fund your savings, retirement, emergency and college accounts. Taking courses and jobs that train you to move upward are the best ways to consistently increase your salary over time.
2. Don’t assume you can replace your wealth
If you understand that every single dollar you accumulate, whether it is from employment, inheritance or any other windfall is precious and you manage it as though it were your last. People who don’t understand this, acquire money, sometimes large sums and spend it foolishly because they feel there is always more where that came from. This is not necessarily true, many don’t find this out until they want to retire and realize spending retirement money before they retire or simply not saving enough, is a major source of elderly poverty.
3. Create a bulletproof portfolio for security
Learn the basics of investing. Here you can choose low cost, low risk investments for your retirement and other investments. There are many investments that are easy to understand and easy to monitor. Monitoring your own investments gives you peace of mind.
4. Recognize the difference between investing and speculating
Investing is placing money in a vehicle that will grow over time — provided you choose wisely. Speculating is more like gambling, or placing money in investments you don’t have a clear understanding of, and hoping they make money over time.
5. Speculate with money you can afford to lose
When you go to a gambling casino, you would not gamble with money you need, like your house note. The same is true with speculating, since it has a tendency to be high risk investing, make sure it is small enough so a loss will not impact your finances.
6. Don’t depend on any one investment, institution, or person for your financial advice
The more you research, the more you learn, the least likely you are to be cheated by an adviser or institution. Remember Bernie Madoff, when questioned, all of his clients said they used him because they trusted him. They did not do their homework on his company and hence, he stole their personal finance security. A check at finra.org, would have shown he was not a registered investment adviser.
7. No one can predict the future
If anyone tells you that an investment will go up with 100% certainty be very suspicious of this person. If anyone gives you a definite percentage the investment will go up, be suspicious. Many investments have past histories, but even those cannot tell you with certainty what the future will be.
8. Whenever you are in doubt about a course of action, error on the side of caution
After doing a lot of research and you still have doubts about a person or institution to invest with, you may want to consider other options.
9. Don’t ever do anything you do not understand
Some brokers will tell you, I know you don’t understand this investment, but just take my word, it will work out. If you don’t clearly understand what they are clearly selling you, wait until you can. You cannot buy personal finance security, but you can use your common sense to keep yourself safe.
10. No one can move you in out of investments consistently with precise and profitable timing
Moving in and out of investments is expensive. Every time you buy and sell an investment, there are cost. Anywhere from home sales to buying stocks or mutual funds. Some cost are far greater than the gains on the product. Investment growth happens over time, the longer you wait the more you make, and the less cost you will pay, due to long term capital gains.
11. Use leverage with caution
When someone goes completely broke, sometimes it is because they used borrowed money. The more money you have to borrow to invest, the more likely you are to get higher interest rates or low quality investment products. The lower your debt, the better chance you have to save money for investing.
12. Beware of tax-avoidance schemes
Every so many years companies come up with financial products that help you to avoid taxes. If it seems too good to be true, it probably is, so be cautious. Sometimes these products are disallowed years after they are put in place, and you will lose your deductions.
13. Enjoy yourself with a budget for pleasure
While it is important to save and invest for general purposes and retirement, it is also important to budget in fun. Fun as in vacation fun or weekend fun, of course within the confines of your budget.
14. Live within your means
My motto is, “Live Within Your Means, and Your Life Will Mean Something”. This will save you money, pain and heartache in the future. The more you place limits on spending within your budget, the better you will feel all around; financial, emotional and mental stability. This is the summation of personal finance security.
15. Protecting your assets with insurance and estate planning is essential
After saving, investing, and having a fun vacation, it is absolutely necessary to protect all you work for or it can evaporate with one bad event. A car accident or home disaster can loose everything if you are not properly insured. Your estate plan will protect your loved ones.
Lois Center-Shabazz | Course Delta Agency
Personal Finance: Author, Blogger, Course Creator, Money Strategist
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