Managing money isn’t fun for everyone. In fact, for most of us, it’s a chore. The average person doesn’t see money management as a path to spectacular future wealth – instead, we see our financial responsibilities as ways to avert disaster. We fear the downside of money management rather than thinking about the upside. And, all too often, our fears come true.

It doesn’t have to be this way. You don’t have to be a financial expert to manage your financial future. Here are some quick tips, including guidance for those in financial distress.


The basics


The basics of personal finance are mostly common sense, but it’s always worth going over them again.

The most important rule of financial security is to spend less than you make. Simple, right? Yet this is one of the hardest things for us to do. Try out some of the popular tricks people use to save. You can “pay yourself first,” which means giving yourself (your savings account, that is) a chunk of your paycheck as soon as you get it, before you pay any bills or have any fun. Many banks let you set up paired accounts that take the change from checking account purchases and save it in a savings account (so if you spend $3.37 with your debit card, you’ll see $4.00 come out of checking – and $0.63 head to your savings).

You want this saving to happen in a savings account, because banks give you interest. Thanks to inflation, having money that isn’t earning interest is basically stealing from yourself!




Once you have enough money to weather a personal disaster (like the loss of your job), the next step is to invest. Investing safely just means investing in a diverse array of things. You’ll certainly want some stocks (an index fund, which tracks a large chunk of the market, will lower your risk a bit) and you’ll probably want bonds (short-term bonds are generally safer bets than stocks). You can further diversify with other types of investments: currencies, commodities, and precious metals like gold. As a general rule, you’ll want to take less risky positions as you get older (you’re less likely to still be invested when the market bounces back).

Invest in a brokerage account, and take advantage of tax-free accounts, too: your work likely offers a 401k program, which will allow you to invest money before you pay taxes on it (you’ll pay taxes someday, when you pull it out again, but by then your tax savings will have grown into big bucks). Within your 401k, IRA, or other tax-sheltered account, invest just as you would in your regular brokerage account: diversely.


What to do when financial disaster strikes


For some of us, it’s too late for simple financial advice to help. If you’re deep in high-interest debt, like credit card debt or payday loan debt, then simple things like saving a portion of what you make become impossible. Many Americans are trapped in a cycle of debt and may feel that their debts are impossible to pay off.

And, in fact, that’s sometimes true – but that can be okay. For those of us who simply can’t afford to pay off our debts, bankruptcy can be an option. If you think you can’t afford legal help, think again – a bankruptcy attorney can be the best use of your money if you’re in a dire situation. Bankruptcy can help free you from the debt cycle. Bankruptcy proceedings hit the pause button on foreclosures, and working with an attorney who specializes in this type of law can give a sense of control that you’ve long been missing.

Remember to take care of yourself when financial disaster is bringing you down. Mental health care services for the whole family can be covered by health insurance policies, so even those of us without much cash can (and should) invest in them. Remember, you won’t be in financial distress forever – but you only get one mind!

Treat financial disaster as what it is: a disaster. Turn to professionals for help, and inspect your own personal well-being (as well as that of your family). Don’t go through a traumatic situation alone. Rely on the pros to see you through, and when you’re back on your feet, remember the simple advice in this article so that you don’t end up in another bad situation!

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