Managing Money Archives - GoldenRules Financial Strategies

Money is Good for Three Things

This spring as you are spending your money, keep in mind
the three things money is good for. If I were to ask you what three
things money was good for what would you say? When I am
teaching how to create a winning spending
plan, I always ask this question and get a lot of different answers.

Let me ask it in another way.

The things you do with money, can be put into three categories, what are they?

When I ask this way, I always get similar answers. Answers like It’s good for paying bills, buying stuff, saving, investing, and going shopping.

And then I would say something to the effect of okay, we got spending and saving. What is the third thing? I put investing into the saving category.

It’s interesting because at this point most of my students go blank. Then
I ask again and say ok money is good for three things, spending, saving,
and…? What are the three things we all do with money?

Most of the time I get no response and ask them to think about and move forward with the class.

My point in all of that is to say that it’s okay to spend your money. It’s yours, you earned it, and you should spend it. Its okay to spend your money, but you should also spend it with a plan in mind. My goal is to help you create a spending that helps you spend within some parameters.

What Are the Three Things?

Simply put, money is good for three things: spending, saving, and giving. Interestingly, sometimes when we talk about money, we forget about giving. That is a discussion for another day.

I am a Financial Coach, and I would like to help you navigate your finances and create a winning spending plan for you and your family. Contact me
here, and we will do an assessment and get started improving your finances one GoldneRule at a time. Take care.

This post is a repost from December 2021.

Money is Good for Three Things

Let me ask it in another way.

The things you do with money, can be put into three categories, what are they?

When I ask this way, I always get similar answers. Answers like It’s good for paying bills, buying stuff, saving, investing, and going shopping.

And then I would say something to the effect of okay, we got spending and saving. What is the third thing? I put investing into the saving category.

Most of the time I get no response and ask them to think about and move forward with the class.

What Are the Three Things?

Simply put, money is good for three things: spending, saving, and giving. Interestingly, sometimes when we talk about money, we forget about giving. That is a discussion for another day.

This post is a repost from December 2021.

Managing Money Through Tough Financial Times

You should set aside some money, six to twelve months or so of expenses as a rainy day or contingency fund. An emergency fund allows you to stick to your spending plan and still take care of that unexpected medical bill or car repair. It also gives you confidence and peace of mind knowing that an emergency expense won’t derail your plan.

The past couple of years have been tough financially for many. Saving for the future and making sound financial decisions can help you endure the next economic downturn. Below are some tips to help you manage through tough financial times.

Start saving for an emergency fund or rainy-day fund. Do you remember when your grandmother told you to save something for a rainy day? Today, this is an old-school recommendation that is made by many financial coaches. You should set aside some money, six to twelve months or so of expenses as a rainy day or contingency fund. An emergency fund allows you to stick to your spending plan and still take care of that unexpected medical bill or car repair. It also gives you confidence and peace of mind knowing that an emergency expense won’t derail your plan.

Make a plan to spend your money. Most people do not deliberately plan to spend their money. Bills come, and bills get paid. Money comes in, and money goes out. They go to the store and spend without a clear plan for their spending. To manage money in tough financial times you should plan to spend your money. Before you get paid, sit down and write out where you plan to spend your money. If you can, try and base the spending on the previous month or prior spending history. For example, if you spent $150 at the grocery store last week, you would probably spend $150, or close to it this week.

Keep track of where you are spending your money. Get a piece of paper and pencil and sit down and keep track of every-dime you. By tracking your spending you accomplish two things. First, you give yourself a benchmark to plan the next month or period’s spending; the next month’s spending plan. Second, you begin to see where you can cut back on spending. By writing down where you spend money you will begin to see patterns of behavior that can be changed to save you money and help you spend smarter.

Use credit cards with care. During tough financial times, keep your credit card spending in check and attempt to pay balances in full every month. If you cannot pay the full monthly bill, at least pay the minimum balance due. Every dollar over the minimum reduces the amount of interest you will pay.

Comparison shop and get the best deals for financial products. Shop deals on things like credit cards, loans, and other investments. Avoid alternative forms of borrowing including, payday loans, pawnshops, and overdraft protection. Keep away from these borrowing methods because they are very likely to have higher interest rates and can add up quickly. This is as crucial as shopping for other big-ticket items like cars or appliances. Saving even a percentage point on a loan can make a big difference to the bottom line. And when it comes to your investments, compare fees on mutual funds and other investments

Using the tips above will help you prepare and go through tough financial times. As Maya Angelou said, “Hoping for the best, prepared for the worst, and unsurprised by anything in between.”