Foundations of Finance

My father has been sending me information about finances, budgeting, and investing for years. Luckily, the information he sends and the books he asks me to read have helped me become far more budget savvy then I would have been otherwise.

Yesterday he sent me a copy of an article that he thought was “a good reminder” of how to manage your money.  I thought I’d share a couple of the highlights from the article that I thought were pretty important points.

First, get serious about retirement.  The time to start investing is in your 20s.  Currently, I’m in my lateish 20s and have been investing for years.  It doesn’t matter exactly how much money you make.  The point is, you need to take at least a small (if not large) chunk of that money and start saving for your future life.

The fundamental needs of planning for a good retirement is to figure out when you want to retire, how much money you want to have saved for retirement, and how much you’ll need to start putting away to reach that goal.

If you wait too long to start saving for retirement, you could have a painful and frustrating time getting to the amount you want.  Plan ahead.  Budget out enough for your retirement (401K’s are great!) so that you can live comfortably when you get to that point in your life.

The second point that I particularly liked was to diversify your investments.  Along with putting aside retirement money in a specific (and safer) sector, you can-and should-invest in different types of investment pools.

Spreading your money out can help in more than one way.  You want to ensure that if you happen to lose money in one area of the market, that you have other investments that won’t lose at the same time.  And, once you start investing, don’t stop!

Continue to learn about different investment techniques and discover what works best for you.  There are tons of different types of investments.  Some may work out well for you, some may not.  But, keep trying.  Work at it, talk to your financial planner or broker so you get your money in the best investments.

There are all kinds of tips and suggestions available to you that can enable you to become smarter in your money management.  These are just a few of the things that can help!