While we’re certainly not experts like Mellody Hobson or Michelle Singletary, we have picked up a few tips along the way from financially savvy friends of ours that we thought we’d share with you.
1) Between The Sheets…Spreadsheets, that is: If you don’t want to spend $100 on Quickbooks software, try using Microsoft Excel (for Mac or a PC) to create spreadsheets that capture your expenses, income and savings. Microsoft has all sorts of free templates that you can download online. The great thing about them is that they come preloaded with formulas so all you have to do is input your information.
2) To Invest or Not To Invest…That Is The Question: If the extent of your investment knowledge is “buy low sell high” then chances are you’ll appreciate the recommendation to read this book titled “The Little Book That Beats The Market” by Joel Greenblatt. A mentor recommended this book and it’s fabulous. It’s a short, easy read that breaks down investing into the basics. Think of it as finance for non-financials. Flag and highlight the pages so you can easily refer back to the information when you need it.
3) Finance and Cheese: Too often we get together with our girlfriends to share the latest dish on men, work, family drama etc. But when was the last time you got together specifically to learn from one another? If you ask around, chances are you have at least one good girlfriend who majored in finance. So for your next gathering of the girls, make it a “Finance & Cheese” night. Ask your financially savvy girlfriend to be the guest of honor, solicit questions from your guests in advance and provide them to your financially savvy girlfriend so that she can prepare in advance for the gathering. Pop a bottle of good wine, lay out some wonderful cheeses and voila! Instant lunch and learn…or dinner and learn.
4) Direct Your Direct Deposit: In most cases you can have your direct deposit go to multiple accounts. Try setting yours up so that a specified sum of money goes into an interest bearing savings account every two weeks before you even get to see it. It will force you to be disciplined enough to live off less.
5) Set Goals: Experts used to say you should have 3-6 months worth of salary saved up. Now that the economy is rough, most experts say you should have at least a year of living expenses saved up. This of course requires getting diligent about paying yourself first. While you’re doing this, consider making some head way on other financial goals too like paying off all of your credit cards or consolidating your student loans.
6) One and Done: ATMs are simultaneously a blessing and a curse. The good thing about them is that they make it convenient to get money when you need it. The bad thing about them…is that they make it convenient to get money when you don’t need it. Easiest way to curb your ATM habit is to decide in advance how much “mad money” you need for two week. Get that money from the ATM in one lump sum and don’t visit the ATM again until your two week time period is up. If you have money left over by the time you reach your two week mark then that’s an indication that you took out too much. Adjust your withdrawal for the next time around.
Do you have some money tips to share? Feel free to do so by posting a comment below.