Budgeting is the process of creating a plan that outlines how you will spend your expected income. Essentially, budgeting is a system that ensures you take control over your money instead of your money taking control over you. Instead of your money telling you where to go, budgeting helps you guide and direct your money to where you want it to be.
Budgeting is foundational to achieving your financial goals. Maybe you want to retire at 60, pay down 10% of your mortgage or pay 50% of your child’s college tuition costs in cash. Budgeting is how you ensure you are directing your money towards these goals in a way that guarantees you reach them.
Budgeting is a crucial part of personal finance and it’s difficult to achieve any form of financial wellness without it. In essence, budgeting is the process of creating a smart spending plan.
There are two key components of a budget: your income and your expenses. Income is money earned...
Written by True Tamplin, BSc, CEPF®
Personal finance is the process of planning and managing your personal financial affairs. It involves all aspects of your financial life, including saving, investing, spending, banking, insurance, mortgages, investments, retirement, tax, and estate planning.
Understanding the concept is essential because it helps you make smart decisions with your money. It gives you a roadmap to financial security and freedom.
Without a solid understanding of personal finance, you may find yourself making poor choices with your money that can have long-term consequences. For example, you may end up carrying too much debt, or not saving enough for retirement.
Ultimately, personal finance helps you...
There’s more to investing than just the stock market. In fact, diversifying your interests is the best policy to help combat market volatility!
Here are three other markets you should look into:
Investing in real estate is one of your safest bets. Properties offer a great long-term security option. Plus, there are multiple ways to invest. The most commonly known is just buying a property, whether you’ll keep it as a vacation home, rent it, or flip the fixer upper. But there are other options, too.
Don’t want to deal with property management? No problem! You can invest in REITs, or Real Estate Investment Trusts. It’s easy, you can still earn passive income from dividends, and you don’t have to worry about maintenance or managing renters.
Like all investments, gold and silver do carry some risks. But their market fluctuations tend to be spread out over years, rather than changing overnight. And typically,...
One of the most common reasons people give as an excuse to not invest is fear of market fluctuations. And that is a valid fear. No one wants to lose money. But, as Greek philosopher Heraclitus once said, “The only constant is change.”
It’s the same with investments. While “market volatility” sounds intimidating, it really just means the market can move up and down, so don’t get caught up in the crazy up- and down-swings! Historically, everytime the market goes down it’s followed by an upswing.
So here are some steps you can follow when the numbers start to seem scary:
For a long time, it was considered taboo to talk about money while dating or in relationships. But did you know that arguments about money are the second-leading cause of divorce, only behind cheating? And since it’s been estimated of marriages start in debt… There are more than a few opportunities for fights.
Whether you are in a committed relationship, or just want to avoid struggles later on, it’s crucial you don’t avoid talking about finances. Ignoring the issue just gives it time to grow, after all. And the longer it festers, the bigger issues it can cause in not just your relationships, but your overall quality of life.
The best way to solve this issue is to be open and up front. While money should be your lowest priority in finding the person you want to be with, you shouldn’t put off talking about finances. Since it can be uncomfortable and stressful to have these kinds of discussions, take a deep breath...
It’s not a big secret that most entry level jobs, like the ones you get as a student or recent graduate, don’t pay well. And if you’re just starting out, you probably have more bills than you’re used to, things like rent, tuition or student loans. Plus food, gas, and all the extra things like dates and nights spent out with friends, the newest gadgets and trends… The list goes on.
And it can be really difficult to balance all of this — especially when you don’t make very much money. But being responsible with the little cash you do have can save yourself the pain of being buried in debt. Because it’s a lot easier to prevent overspending than to get out from under it.
The little things you do can add up to big savings. Budgets can sound intimidating and restrictive. That’s why we prefer “spending plan”, because really it’s like a checklist for your paycheck. Spending plans are really a way for you...
Whether its the local ice cream shop or a popular retail store, a first job is an exciting experience that brings with it new kinds of responsibility and freedom. It is also the perfect opportunity to start teaching yout child about managing money, regardless as to what their paychek may look like or what their expenses are (if they have any).
We’ve put together three financial tips to teach your child about to get them to start thinking about their money and how they manager it. The younger they learn about financial responsibility and money management, the smarter they’ll be when it comes to more serious financial decisions down the line.
Most banks offer great incentives to teens when they open their first bank account. Some banks will offer a bonus for opening a checking account and most banks waive monthly maintenance fees and don’t require a deposit minimum.
After opening a bank account, see if your child’s...
To reach financial freedom, a common hurdle is understanding financial and investing terminology. The language is odd and the concepts complex, making people doubt their abilities. In reality, this challenge is a manageable one; and with help from Young Money University, it can be a hurdle you can step over with ease!
To get started, we’ll cover two important terms to understand related to investing: Exchange-traded funds (ETFs) and mutual funds. Both are forms of pooled investing, giving investors the opportunity to build a diversified investing portfolio. As a result, both types of funds will have a large number of assets within their specific fund.
We’ll provide you with more in-depth definitions and key attributes of each kind of fund and highlight their key difference, providing you with the information necessary to determine which is best for you and your investment goals.
An exchange-traded fund is a type of pooled...
Sending a child off to college is a major step for both the student and the parent. Suitcases, bedsheets, and notebooks all need to be bought and packed. But they’re not the only things your college-bound young adult needs… For the first time in their lives, they’re about to be solely responsible for their own financial success.
They’ll need as much financial guidance and advice as they will bedsheets and notebooks…
To make sure you set them up for both academic and financial success, follow these three tips:
Instill the habit of spending less than you make
3 - 4 = -1. Most people know this. If you lose more than you have, it’s worse than if you just lose everything. Why? Because now you’re in debt.
It’s common sense, so you’d think most people would spend less than they make. But, in reality, very few do. Every month, people earn their paychecks and spend it all plus a little extra. Now, every now and then, this...
Financial mistakes made early in life can dramatically change the face of a person’s life. If young adults aren’t properly equipped to handle their finances, the likelihood of significant financial error increases.
As young adults begin to grow into themselves, they set the rhythm and tone for the rest of their lives. Will they be responsible? Will they take healthy risks? Can they make wise financial decisions? These are all questions parents can help answer before their young adult leaves the nest.
Most of the financial mistakes that are made immediately after high school come not from recklessness, but from ignorance. They don’t know how to handle money right because no one taught them how.
Here are three things young adults need to know about money before leaving home:
Teach them to save differently
People all over the world have the wrong idea about saving money. They conflate it with limiting lifestyles, unpopularity, and boring...