Resumo de Becoming Money Wise - Ronald J. Chewning

Although money is an integral part of our lives, many of us, regardless of age, sex, race, or background, lack a proper understanding of it. We may believe the only money problem we face is not having enough. More likely, however, we have an adequate amount but need to use it more wisely. Money Skills generally don?t come naturally but are acquired by reading and studying.
PLANNING AND PREPARING FOR OUR FINANCIAL FUTURES
Planning gives direction and motivation to accomplish our goals. We PLAN so we can be initiators, not responders. Failing to plan can be costly. Without careful planning, we may pay higher Federal and State income taxes than we need to or not have enough money for education or retirement. Budgeting as planning helps you make intelligent and responsible decisions about the best possible use of your money
THE BUDGET PROCESS
Step 1:- Determine how much money you receive in earnings
Step 2:- Calculate your present level of spending
Step 3:- Determine your priorities and the amount of money you will spend
Step 4:- Establish a budget that is both rigid and flexible. Some expenses are fixed; others such as entertainment, can be changed
Good planning can offer protection as follows
·         It will reduce or prevent impulse buying.
·         It will force you to set priorities
·         It will protect you from debt
·         It will also help you achieve your goals
MONEY WISE
To be wise managers of money we need discipline, goals and knowledge. We need to save for things we can?t anticipate, we should also save to pay for educational opportunities, retirement, business ventures
To Overcome Money Problems avoid the following
·         Too much impulse buying
·         Spending too much on house and car
·         A growing, expensive hobby.
·         Get ? rich ? quick attitude
·         Procastination
·         Covetousness
·         Disorganisation
·         Lack of financial knowledge
·         Lack of commitment
·         Pride.
To be money wise, it is essential to have a Tax Planning attitude, because it will likely be the biggest expense you pay in your lifetime. Becoming money wise also includes understanding and using insurance properly. You face risks daily. Without protection through insurance, an unforeseen catastrophe could wipe away years of hard work and saving.
RESPONSIBLE MONEY MANAGERS
Challenge yourself daily to be wise in your spending, Planning, giving, Managing and Investing. Develop a Spending Plan to be prudent and wise with the money you earn. This helps you to spend money wisely. It is possible to spend less by developing better spending habits and breaking poor ones. Spending less and saving more puts you in better position to accomplish future goals.
MONEY MANAGEMENT PRINCIPLES
·         There is an opportunity cost to consumption:- Spending a dollar a takes away multiple future dollars because the money you spend could have grown in an investment account.
·         Don?t buy what you can?t afford.
·         Commit to a slow, methodical savings program. A good savings program requires patience and self discipline.
·         Money has time value:- with compound interest, both the original investment and its interest earn more interest. The longer and earlier you get money working for you, the better off you are financially
·         Money brings its own problems. Use what you have wisely, and you?ll be fine

Avoid these 10 common money management mistakes:
·         No spending plan
·         No cash reserve
·         Too much use of credit
·         No provision for large expenses
·         Underestimating the cost of ownership
·         Spending leaks
·         Careless Shopping habits
·         Not saving small amounts
·         Can?t wait attitude
·         Poor use of wind falls.
The key to a spending plan is that total expenditures do not exceed spendable income. Look first at your variable expenses to cut costs. Look through your plan to determine your spending habits, good and bad

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