10 Steps to ….

suze_ormanI took the morning off today to attend a free class here on campus entitled “Top 10 Steps to Increase Your Financial Responsibility.” I didn’t expect to learn any of Warren Buffet’s secrets, but what the heck, it was free right? And it is definitely one of the Resolutions around the House of Jello to get our finances on track — it’s been a tough 18 months or so for us, just as it has been for many of you.

So I was pretty pleased with the class, actually. (I didn’t have terribly high hopes for it.) The first half was a very good look at the history of the stock market over the past 80 years and discussion about how different investments have been affected. Sure I took Economics classes in college, but today’s markets bear little resemblance to the financial markets of the early ’80s. No big secrets. You all probably know a lot more about these things than I do. Basically, as someone who probably has a good 20 years before I retire, I need to take a deep breath and chill, as far as investments go. The markets will go back up like gangbusters — it’s just going to take a while. But it will happen.

The second half of the class was more about monitoring living expenses and saving money. Well, there wasn’t really much there that was new, but it was good advice. So I will share the 10 steps with you here:

  1. Have regular “money talks” with your spouse or significant other.
  2. Know your expenses, and live below your means.
  3. Buy in bulk.
  4. Comparison shop on everything.
  5. Check your credit score regularly.
  6. Create an emergency fund of at least 3 months expenses.
  7. Have a “side hustle” — something extra that you do to bring in income: teach piano lessons, sell on eBay, write for eHow (that’s just my suggestion)
  8. Forget about the Jones’s.
  9. Pay in cash — and not with a debit card, either. Studies show that consumers spend 20% more of items when using a debit card than when they are handing over cash.
  10. Understand the difference between a “need” and a “want.” The example that struck home to me was: do you need a flat screen t.v., or do you want a flat screen t.v. (And really, who doesn’t want one!)

As I said, it’s all common sense. But since that has been in short supply in this country for awhile, perhaps these steps do bear repeating. Everyone’s situation is different, so some of these things are do-able, others are not. Saving 3 months worth of expenses is a pretty tough call for most of us, even though Suze Orman says we must. Suze Orman, after all, has her own job to do: sell more Suze Orman books!

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5 comments

  1. We’re working on it. Those tips are good ones. It looks like I’ll be picking up my side job working for the lawyers again next month sometime. That will help.

  2. I know it’s all advice we’ve heard a million times before, but sometimes I personally don’t hear it until # one million … and one.

  3. I had the need vs. want thing down cold a long time ago. It was the first step for me in figuring out my real budget back in the late 80s. Never deviated from it since then.

    That said, you also need to figure out a way to give some back to worthy causes or the community. You’d be amazed how satisfying that is.

    Regards,

    Tengrain

  4. I agree completely, Tengrain! And I think that can be helpful in getting to needs vs. wants. It can really help keep things in perspective ….

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