To help you get started, we'll take a look at eight of the most important things to understand about money if you want to live a comfortable and prosperous life.
- Learn Self Control
If you're lucky, your parents taught you this skill when you were a kid. If not, keep in mind that the sooner you learn the fine art of delaying gratification, the sooner you'll find it easy to keep your finances in order. Although you can effortlessly purchase an item on credit the minute you want it, it's better to wait until you've actually saved up the money. Do you really want to pay interest on a pair of jeans or a box of cereal? (To learn more about credit, check out Understanding Credit Card Interest and our Debt Management feature.) If you make a habit of putting all your purchases on credit cards, regardless of whether you can pay your bill in full at the end of the month, you might still be paying for those items in 10 years. If you want to keep your credit cards for the convenience factor or the rewards they offer, make sure to always pay your balance in full when the bill arrives, and don't carry more cards than you can keep track of.
- Take Control of Your Own Financial FutureIf you
don't learn to manage your own money, other people will find ways to
(mis)manage it for you. Some of these people may be ill-intentioned,
like unscrupulous commission-based
financial planners. Others may be well-meaning, but may not know what
they're doing, like Grandma Betty who really wants you to buy a house
even though you can only afford a treacherous adjustable-rate mortgage.
Instead of relying on others for advice, take charge and read a few
basic books on personal finance. Once you're armed with personal finance
knowledge, don't let anyone catch you off guard - whether it's a
significant other that slowly siphons your bank account or friends who
want you to go out and blow tons of money with them every weekend.
Understanding how money works is the first step toward making your money
work for you. (To find out how to have fun and still save money, see Budget Without Blowing Off Your Friends.)
