The Low-Down Dirty on Managing Money

By Boyce D. Watkins

Business Editor

July 5, 2007, 10:06 p.m. - If you are like me, then you hate yourself for the way you’ve been spending your money. You might be sick and tired of getting tired and sick, and when you see a bank robbery on the news, you find yourself saying "I'm not saying they should have done it....BUT I UNDERSTAND." It’s easy to get fat and sloppy in America, both physically and financially. But sometimes hitting rock bottom can be a good thing, if it takes you to a higher level.

I am teaching a course called Wealth Management here at Syracuse University, which is really Personal Financial Planning. It is based on some speeches I've done, as well as some of my own personal financial mistakes. So, I figured that the teacher should be his own best student (or so I hope), and I thought I would share some quick tips to help us all get our "paper straight":

1) Managing money is about emotion and mindset, not expertise - I learned more about managing money from my grandmother (who never graduated from college) than I learned from all of my academic degrees put together. She kept it simple: She planned her spending with a budget, set savings goals, and made a commitment to keeping more money than she spent. Yes, I thought she was a tight wad, because she would cut you over a nickel. But she's NEVER had to ask anyone for money, even though she is single and never earned more than $25,000 per year. So, rather than taking another class to learn to manage money, we probably just need to talk to our grandmothers.

Story continues below ↓

2) When you save, pay YOURSELF first - What person on your payroll is more important than you? But then again, who is the one that you can trust the least with your money? For many of us, the answer to both questions is “you”. Make the funds difficult for you to get your hands on, and have them automatically deducted from your account. Make saving a part of your budget, not something you do with leftover funds. If you don't save at all, then any form of saving is better than nothing, even if it means having more money withheld for taxes. Remember: a recovering spendaholic must take things one small step at a time.

3) Money CAN buy happiness, if you use it right. - If creatively and intelligently applied, money can be used as a tool to enhance your life. It is not meant to be hoarded, and it is a means to an end, not the end in itself. If you are throwing away the most important parts of your life in the dogged pursuit of money, then you may be losing some of your most valuable assets. Some of the richest people in the world don't have any money at all.

4) Everyone should have a budget - If you wake up after weeklong spending binges, not knowing where your money went, you might be a spendaholic. Make a budget and give yourself a cash allowance. Take out your savings first, then pay your bills immediately. DO NOT use credit cards for anything other than big purchases.

5) Invest in SOMETHING, even if it's YOURSELF -You might want to learn how the stock market works, buy Tupperware to sell to your friends, or go back to school to get that next degree. It can be ok to be a spendaholic, if you are spending all of your money building your new business. But also remember to invest by giving your grandmother roses on her birthday, or by spending extra time with your kids. That is how you build a truly valuable portfolio.

(Dr. Boyce Watkins is a finance professor at Syracuse University. He makes regular appearances in national media, including CNN, FOX and BET. He is also the author of Financial Lovemaking 101: Merging assets with your partner in ways that feel good. His column is published here every Friday exclusively on Redding News Review. You can reach Dr. Watkins by going to www.boycewatkins.com).

Return to ReddingNewsReview.com
© RCI 2007. All Rights Reserved.

hrr: