Its’ time to study up on your finances. One place to find financial information is at your local public library. You also can read free online magazines about how to save money.
Here are a few magazine websites to visit:
- Good Housekeeping http://www.goodhousekeeping.com/ (under the "saving money" tab and the “budgeting and planning” tab)
- Better Homes & Gardens http://www.bhg.com/ (under the family and money section)
- CNN Money http://www.money.cnn.com/
- Real Simple http://www.realsimple.com/
- Consumer Reports http://www.consumerreports.org/
Television shows and television news segments offer financial advice and suggestions about consumer products. American Consumer TV www.americanconsumer.tv and Real Simple www.pbs.org/realsimple on your local public television station are two of many television programs you can watch.
Your newspaper may have a column on how to save. For example, the Los Angles Times has a business section with savings tips. You can find out more at the Los Angeles Time's website: www.latimes.com/costofliving. Also, visit libraries and bookstores for books, audio tapes and CDs with financial advice.
As with all advice, carefully analyze financial advice that you hear or read about in the media. Remember, it is designed for the average person, not you specifically.
Ask for advice
When you meet people who are successful at saving and keeping a budget, ask them how they do it. You don't have to "re-invent the wheel."
Ask financial consultants for their suggestions about how you should save and invest your money. Examine their suggestions carefully, and don't rush into anything. Ask lots of questions and listen to the advisors' answers. Do you understand their recommendations? You must decide if their advice is going to help you specifically, not just most people in general.
Even the best advice has its advantages and disadvantages. Sometimes, in their eagerness to promote advantages of a particular financial product or strategy, advisors neglect to fully explain the disadvantages.
One example of lack of communication is "sub-prime teaser-rate" home loans. These loans have a low "teaser" rate at the beginning, in order to help get the buyer into the loan. But the interest rate rises sharply when the loan rate "resets" and the monthly house payment can skyrocket. When home buyers heard the advantages of these loans, they sounded like a great idea. They assumed that they would be able to handle the payments when they increased later. Many homeowners claim, however, that they didn't fully understand the huge potential disadvantages when they signed up for these loans.
It's your responsibility to make sure that the source of any advice you consider—whether from the media, a friend, or advisor—is reputable and qualified to give advice on that topic. No one financial product or strategy is going to fix everything. Test the advice against your "gut" instinct and your research. Does the advice help you reach your goals? (Or do they help the advisor reach his goals instead?) Consider carefully if the advice is practical for your specific circumstances and if you are really comfortable following it.
Be prepared to adapt
"We've always done it this way." These six words are opportunity killers. Change is hard but sometimes it's necessary and often, it's good. Don't be afraid to try new approaches to see if they work for you.
The world will continue to change at an alarming rate, and your life will change along with it. If you think about it, "change" is the only guarantee in life. It is the only thing about which anyone can be sure. We all have to live with the awareness that our current situation could change suddenly at any time—either for the better or for the worse. Live by the motto, "Expect the best, but plan for the worst."
Proactive people plan for any possibility. They are ready to adapt. You can be, too. Build your emergency savings fund now. Then you will be able to be flexible and adjust to the changes that are bound to occur eventually.
Strengthen your character
The choices you make with your money show your true character. Do you feel competitive, greedy, or impatient? Are you unwilling to wait for the things you want?
Take a look at yourself and your financial reality. Build your inner character by doing what you know is right with your finances. This is financial maturity: to accept responsibility for your financial reality and take action to improve it.
To pay attention to your financial reality is the reasonable and mature thing to do. Start today to make some changes in the way you manage your money. It will change your life.
Heidi Clingen is a long-time resident of Stevenson Ranch. She and Samuel K. Freshman are authors of The Smartest Way™ to Save, Why You Can’t Hang on to Money and What to Do About It. They offer only their opinion, which does not constitute professional, financial, or legal advice. To receive a copy of The Principles of Financial Independence or submit questions, email them at Heidi@TheSmartestWay.com
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