The basics of money and money management seem undeniable: spend less than you earn, avoid debt, save, and invest in a diversified, low cost portfolio.
How we behave with our money can be the difference between a successful, happy and stress-free life and an unsuccessful, unhappy and stressed one. Whether we like it or not, money matters.
Unfortunately personal finance can be a real struggle for many people and too many people let so-called “experts” manage their money, instead of spending a bit of time to first learn and make their own informed money decisions; and second to develop reliable instincts and habits for long-term financial success.
In my opinion, everyone should learn about money and understand how to budget, save and invest. The basics are not that complicated really. It’s consistent actions that are harder, and without consistent actions, you miss out on what Einstein allegedly called the most powerful force in the universe: compound interest.
In this three-part series on personal finance tracking, we will be looking at the basics of good financial behavior, how to track your finances, and how to come up with goals for saving and investing.
I’m no financial expert nor genius on money, but I have managed to create a life I love; a life where I save much more than I spend and invest it in ways that create returns. Good financial “ hygiene” and some tried-and-true investment strategies have enabled me to spend my time and money on the activities and things I truly enjoy without stressing out about money all the time too.
In this first part, I’ll share a few of the things I’ve learned about personal finance and money management. I call these “first principles,” and I think having simple go-to rules is a key part of being money smart. These are mine, and some of yours might be the same or the they might vary.