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Ten Ways to Make the Most of Your Money and Your Life

I made reference yesterday to Eric Tyson, the author of Personal Finance for Dummies. The following is a list of the author’s best tips for handling bills, investments, and balancing work with life. Here is the run down:

  • A budget is not the best way to save more. Tyson says a budget is a like a diet: inefficient and unpleasant. In essence, creating one won’t get to the root of money problems. (I completely agree with this. I think budgets are simply too strict to stick too.)
  • Do track each and every expense in a small notebook. Simply knowing where your money is going should help you identify and cut extraneous expenses. (Honestly I keep considering doing this, but have yet to do so.)
  • Replace credit cards with debit cards. In essence, then you can’t spend what you don’t have. (I agree with this approach if you aren’t disciplined enough to pay off your credit cards each month. If you are disciplined, I think using a rewards card is still smarter than using a debit card.)
  • Stop shopping as a means of entertainment or distraction. Begin to look at shopping as nothing more than a means to acquire a product you need. This should cut down on impulsive purchases. (I would also add, don’t go to the store unless you need something. And when you need something try to head right for the isle where the item is located. Walking through isles will ultimately lead to unexpected purchases).
  • Pay off debt before saving and when you start saving put an automatic plan in action. (There is a definite peace of mind that comes from paying off debt.)
  • Decide how to handle your investments by deciding whether investing is a life task or hobby. Discuss your investing philosophy with your family. (My husband and I have discussed hiring a financial planner on multiple occasions. As of yet, we have decided not to do so. In the mean time, we purchase mutual funds and stocks and hold on to them for the long term.)
  • Pull back from stressful situations before making future financial decisions. (I couldn’t agree with this more, in the crux of stress the last thing you want to do is make a poor financial decision. If possible avoid making financial decisions until you are in a better state of mind.)
  • Don’t follow on-air and on-line financial ‘gurus’ who urge individual stock picks that require rapid changes to your investment portfolio. Tyson specifically mentions, Jim Cramer, pointing out that there is no evidence that ‘gurus’ have beaten the markets over time. (My one exception would be the on-air personality Suze Orman. I think she provides generalized financial advice that is worth listening to.)
  • Do not focus on promotions and pay raises. These are often achieved by workaholics.
  • Choose employers who provide the flexibility to accomplish your personal and family goals. (I discussed this in detail in yesterday’s post.)

To learn more about Tyson’s tips visit Ten Ways to Make the Most of Your Money and Your Life.

credit card debt

Thursday 22nd of March 2007

I think that the concept of enjoying life even with the help of money that is not yours appeals to people better. that's why we may talk about frugality, saving money, but most people will get loans, credit cards and try to make the most out of their lives

NoleCC

Wednesday 27th of December 2006

Specifically regarding Jim Cramer... I don't think he's ever claimed to be a personal finance manager. He picks stocks, he makes finance entertaining (which is a good thing for most of us) and is one of the few people that I've ever heard of admitting that stocks and options (especially options) are basically bets.

Suze Orman is the personal finance manager of CNBC... Cramer is your stock picker if you choose to go that route.