This is the second post in which I discuss Money Magazine’s recent special report: 31 Ways to Improve Your Finances. As you may recall from part 1, I felt there were 10 ways that stood out above the others. So, in this second post I’m going to share my remaining favorites. Money provides some finance advice from a number of experts in the second half of their special report. Here are my favorites:
Favorite ways to improve your finances (part 2)
Retire your debt before your retire
Jane Bryant Quinn – The dean of personal-finance columnists and author of Making the Most of Your Money.
I suppose this is a new idea for some people, but if you look at the Crown Money Map, or Dave Ramsey’s Baby Steps, you’ll see a step geared towards paying off your home mortgage. I think often such advice is brushed over and not taken seriously by many because it seems like such a big goal to achieve. But, stop and think about the advantages you might have should you pay off your home (I can think of three):
- No monthly payments, so your monthly income from your retirement savings can be less each month.
- Your lifestyle could drastically change. For example, you may have an opportunity to volunteer your time to help others.
- If you are still working (ideally, in another line of work) you don’t have to worry about making a house payment should the economy worsen and you lose your job.
Good money management is a lifestyle. If you surround yourself with people share the same values, you’re more likely to stay on track.
I love this advice! This is a quote from co-founder of the Wise Bread personal finance blog.
Three things come to mind when I read this quite:
- If you spend time with people who mismanage money, chance are you’ll fall into the same bad habits.
- Surround yourself with people who are on the same financial journey as you. Find out what they are doing to accomplish their goals and learn from them.
- Spend time sharing values, such as Biblical principles about money to guide your way.
- Spend time on-line reading personal finance blogs, or visiting personal finance websites that built on solid foundations that align with your values. Again, Christian personal finance blogs and/or websites are a good example.
Take a long view of the economy
Bill Gross – Managing director of Pimco and the world’s most influential bond fund manager.
Most people look at the market daily and monthly and get emotional about the ups and downs. Unless you’re day trading (which is a ridiculous get rich quick approach to investing) there is no need to look at your portfolio this often. The best thing to do in carrying out the long view advice here is focus on what you can control, or manage. You can control, your investment to your 401(k). You can insure you invest a certain percentage of your income and increase that a little bit each year.
Focus on your needs, not wants.
Liz Claman – Fox Business Network anchor and author of The Best Investment Advice I Ever Received.
We all want what we can’t have. I certainly can think of a few things I would love to have, but it just doesn’t make sense for me to purchase them at this stage of my life and financial journey. I love Liz’s example of want what we can have in the article.
We all have to learn from our mistakes of overleveraging ourselves and acting like 5 year olds – I want four cooks. You don’t need four cookies; you only need one. It’s not about what you want, it’s about what you need.
The point is made that we have to reassess our human behavior and not only live within our means, but below them. I think that is such sound financial advice. Creating financial margin in our lives, by living below our means, reduces stress and gives us more freedom in our lives.
Have faith that you’ll persevere
Meir Statman – Professor of finance at Santa Clara University and a leading expert in behavioral finance.
The advice here is we are more resilient than we imagine. Certainly, there are people who have experienced more trouble than many of us and have persevered.
While it’s important to believe in yourself, I believe we should put our faith and trust for our financial lives in God. God provides when we are in need and He promises to take care of us. Yes, you will persevere, but only because God is greater than any financial worry, or problem you’ll ever experience.
Well, that’s a wrap on this two part series. What did you think about this financial advice from some of the leading experts in the area of personal finance? Do you have a favorite one?
