Financial Education Advice from Jim Garnett
This FIT Academy post is compliments of the Institute for Consumer Financial Education (ICFE); here are three great tips to help you get control of your finances in 2010. This free financial advice is courtesy of the “Ask Mr. G” column, which is featured on the ICFE web site.
Mr. G starts by identifying a major problem Americans have with their personal finances:
The reason many Americans do not have control over their money is because they have the wrong perspective toward their money. They view their money as a whole pie instead of a pie that is sliced into pieces. It’s really that simple.
He goes on to offer three steps to address this problem:
- Determine what bills are have to bills and total their amounts for the entire month. Include an amount for savings as a have-to bill.
- Separate that amount of money from the rest of your take home pay by putting it in a separate checking account. This amount is designated for bills and should not be spent for other things. (If you are paid weekly, take one-fourth of the total amount needed from each paycheck; if bi-weekly, take one-half the total amount needed from each paycheck.)
- Divide the rest of your discretionary monies into 3-4 labeled envelopes like Entertainment, Clothes, Gifts, Vacations, etc., so you can plan to have money available for these things. If there is money in the envelope you can buy it; if not, you cannot.
Be sure to read the whole column at the link above. While you’re there, check out all the great content at the ICFE site and dozens of Mr. G columns on a whole range of financial education topics.
