Finance Lessons for Average Americans
When many people hear the word finance, they think of Wall Street or large corporations handling millions or billions of dollars in funds. The fact is that most people deal with finance every day and it doesn't take an MBA, just an income. Finance simply means managing money, whether it's a household budget or corporate investments. Some people are better at managing money than others, but there are lots of resources to help anyone get better at budgeting and investing their funds.
If you have trouble budgeting your income, you can choose to take money management or finance courses at continuing education centers or local community colleges. Several finance experts have written books on money management which you can buy or check out the library. Learning how to keep a ledger of expenses can show exactly how you spend your income and where you may be able to cut spending. While managing to stay within a target budget can be difficult at first, it will cut down on stress and worry in the long run.
There are several reasons to save money in a bank account or investment fund. Everyone needs to have money put aside for unforeseen expenses like car repairs or home maintenance. If you have to put expenses like these on a credit card, the interest can cost almost as much as the actual repairs. Money in a bank or investment fund earns interest and is available if you need it. Saving money may mean making sacrifices in the short term, but it means more money in your pocket overtime. Good finance tactics include putting your money to work for you.
Unless you have money you can afford to lose, avoid high risk investments. There are probably several emails in your inbox that say for just $39.99, they will show you how to make thousands of dollars a week. While many of these schemes may seem plausible, they will not make money for the people who spend $39.99; they just make money for the people who charge $39.99 for useless information. Many people have spent hundreds of dollars on schemes like these without earning a penny. Corporate finance managers plan long term investment strategies and household finance managers should workout an investment plan that makes money overtime rather than trying to get rich quick. The truth about finance is that most people already have the knowledge they need to manage money effectively, they simply choose not to use it.
