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People are over leveraged or can’t pay their mortgages, credit card debt is out of control, and many just owe too much money.  These are all problems that relate to having poor money skills.

Our schools don’t teach our children anything about money skills.  As parents we often don’t do much teaching in this area either. 

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Popular culture has one believe that we should all get everything we want right now, and if we can’t get it right now we’re about to either win the lottery or become a star on a reality series.

Instead why don’t we just learn how to be better money managers?  Here are some things you can do to improve your money skills:

Measure where your income comes from and where it goes.  There are several great programs for helping you measure the inflow of your money and where your money goes.  Quicken is the largest of these programs and for less than $50.00 you can buy a very sophisticated program that is easy to use.

Understand where you are today.  Putting your financial information on a ledger or in a software program will quickly allow you to find out where your money is going.  The key here is to track all expenditures.  This includes the specifics about where you spend money you take in cash from ATM’s or getting cash back from your debit card.

Don’t punish yourself about where you spend your money, but know where you spend it.  Knowledge about where you stand today will help you develop a plan to improve your money skills.

Put a plan together to help you spend money where you think it’s important.  When you start to understand where you spend your money you can then decide whether this is where you want to spend it.  If you’re spending too much then having good information will start to give you some ideas where you can spend less.

Whatever you do don’t set goals.  Instead go for some improvement.  After you get improvement go for a little more improvement.  After six months of moving towards better money skills you might notice that your financial situation is much better.

Improving money skills is not about punishing yourself.  Constant improvement is satisfying, but before you can move towards improvement you must know where you are today.  Measurement of is the place to start and then plan for how you can improve.

Josh Patrick

Securities and Investment Advisory Services offered through NFP Securities, Inc. (NFPSI), Member FINRA/SIPC. Stage 2 Planning Partners and NFPSI are not affiliated.

This article is published for residents of the United States only.  Registered Representatives and Investment Adviser Representatives of NFP Securities, Inc. may only conduct business with residents of the states and jurisdictions in which they are properly registered.  Therefore, a response to a request for information may be delayed.  Not all of the products and services referenced on this site are available in every state and through every representative or advisor listed.

Topics: wealth management, finances, Personal Responsibility

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