Becoming a Smart Financial Manager for Today and Tomorrow

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No one wakes up one day as a smart financial manager. Lessons learned as a child, pave the way for being able to manage your money as an adult; or not.

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Before the printing press and the ability to ‘easily carry’ paper money, people may have engaged in barter for the things that they needed. You could look at money, as anything that is accepted for the payment of goods and services or as a repayment of debt.

The concept a child develops growing up about money, will have a tremendous affect on how they value it. Teaching a child the concept of working as a way to earn money that they can then use to buy what they want and need, should not be a forgotten part of childhood. It teaches responsibility. As early as possible, open up a saving account for your child and deposit money into it, on a regular basis. Take your child to the bank, so they can see you depositing the money. Even if it is $1 or $5, let them be part of the experience. Explain to them how they will earn interest on the money, and have more than they put into the account at the end of one year.

It is too easy to see an ATM (automatic teller machine) machine as a ‘money dispensing machine’ without realizing that you must deposit money into an account to have access to it, via the ATM machine.

As children get older, let them participate in family decisions about spending money on things such as family vacations and dinners out. Let them be involved in the college financial process so that they can go to college. Start to have them see that if there is not enough money set aside to pay for college, they will have a loan to pay off after graduation. The larger the loan, the less disposable income they will have, IF they get the well paying job they are hoping for. Nothing is a guarantee. Becoming a smart financial money manager, will help in everything a person does.

Develop the ability to differentiate between ‘wants’ and ‘needs’. Every time you go shopping, create a shopping list. It doesn’t matter if you are going grocery shopping, or to the mall. Know exactly what you are looking for, and set aside a specific amount that you are willing and able to spend on each item. Identify which items are not necessary, and the other items which you need to have.

The same habits developed as a child with their first savings account, can be used later to for retirement planning, so that social security doesn’t have to be the sole resource of revenue after retirement. Not everyone will have a pension plan from their employer, and more responsibility will be placed on the worker, to provide for their post working years. If your employer has a 401K investment plan, participate in it. The employees participation, will lower your federal tax liability. If the employer, has a matching funds program take advantage of the maximum that they will contribute to the plan.

Sit down and write out a plan for everything you do. Use direct deposit whenever possible, so that the money you would like to save is automatically put away, before it is put into your checking account. Failure to plan, means you plan to fail….small steps will lead to a better financial life.

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Becoming a Smart Financial Manager for Today and Tomorrow, Seekyt
General Contributor
Janice is a writer from Chicago, IL. She created the "simple living as told by me" newsletter with more than 12,000 subscribers about Living Better and is a founder of Seekyt.