Summary List Placement
Someone who is good with money doesn’t have a certain number in their bank account or net worth on their balance sheet. Rather, they have identifiable qualities that reflect their ability to meet their needs, plan for the future, and still enjoy life today.
For Business Insider’s yearlong Master Your Money series, a group of personal-finance experts called the Money Council convened to discuss how to develop and maintain good money habits, transform negative mindsets, and budget for an ever-changing financial situation.
Here are some of the qualities they say are common in people who are good with money.
Balancing today and tomorrow (and many years down the line) can be tough. But people who are good with money know how important planning for the future is.
Kristi Rodriguez, the vice president of thought leadership at Nationwide Financial, said she takes time at the beginning of the year to reflect on the past and plan ahead, posing questions like “What are the most important things in my life right now?” “If money was no object, what would I want to do right now?” And “How do I envision myself now and when I finish working?”
Establishing a well-defined goal — whether it’s buying a house with a 20% down payment or retiring early with $1 million in the bank — and breaking it down into smaller milestones can do wonders for escaping an “all or nothing” mindset many people find themselves trapped in, she said.
“If we get more in that mindset of just making it easier, particularly for millennials, to understand the allocations of their savings and how that moves toward a particular goal, it will take them out of that mindset of lack and into more of that abundance,” Rodriguez said.
Eric Roberge, a certified financial planner and the founder of Beyond Your Hammock, added: “When you start to see your balance growing, whether it’s in a savings account or investment account or both, you get excited. And the more excited you get, the more you want to do it. And then it becomes kind of fun to save money.”
Rod Griffin, the senior director of consumer education and advocacy at Experian, said that accumulating assets without a goal in mind — “the ‘I want to buy stuff’ approach” — isn’t a sign of financial progress or productivity.
“If you’re just buying stuff,” Griffin said, “you’ll never be good with money.”
If your goals set the path for spending and saving your money, your values are the framework that keeps you on track from day-to-day.
Alison Hutchinson, a managing director at Brown Brothers Harriman, said that identifying what’s most important to you financially and generally in life can help automate your decision-making.
You might value quality time with family and friends, staying out of debt, financial independence, travel luxuries, or any number of things. The key is making sure those values are not in opposition to your goals. For example, if you value comfort over cost and spring for a business-class ticket …read more
Source:: Business Insider