Be SMART About Your Money

Those who want to manage their money wisely and be smart consumers need only to learn a few basic rules. It's important to teach children these rules so they grow with the ingrained knowledge about how to care for their earnings and avoid difficult fiscal situations. Leading financial education programs advise people to follow similar guidelines to the ones below. In other words, be SMART about your money.

• Set goals and save. Writing goals down often helps to solidify and prioritize them. While a new car would be nice, are you saving for a home first? Creating a savings can be the most valuable action you take with your money. Adding compound interest to savings can mean a large amount of money earned with money saved. CD's can be purchased for a few hundred dollars and can give the owner a piece of mind knowing that an emergency fund is there. Remember that it's an emergency fund; the blow-out sale on plasma TV's does not denote an emergency.

• Manage debt. The key to less stress and more money is managing debt. Regardless of the limit given by the credit company, set your own limit. Don't borrow money that is difficult to repay, and keep a tally on all your credit. A $300 car payment may not cause financial stress, but added to a $1500 mortgage payment and $200 in student loan payments each month, it may start to get daunting. Promise yourself that you will pay for one item before purchasing another, and have patience.

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  On a month that the balance on a credit card can't be paid in full, put the card on hold for two months to be sure you're back on track; don't let it add up. If debt has already accumulated, meet with a financial planner to create a management plan and stick to it. You'll learn from the experience and won't be so apt to create the problem again once it's been resolved.

• Allow for emergencies. Remember that emergency fund? This is where it becomes invaluable. The world is harsh; jobs are cut, accidents happen, and surprises abound. Be prepared for them with several (six to twelve) months of savings. Start building your savings early and it will mature steadily.

• Review fees. Often people are lured into paying high fees for banking. Be wary and ask about "hidden fees." They can't be completely hidden, so keep an eye out for them; they're more camouflaged than hidden. Interest rates change, especially if they are low to start. Surcharges and processing fees exist; know when they apply.

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  Conveniently paying for a credit card by phone may incur a service fee. Likewise, "free financing" often carries a low service fee for each month of the loan with accumulating interest waiting to drop at the maturation of the loan. Be aware of where your money is going and keep it where it is.

• Try to spend wisely. The true trick for everyone is to spend wisely. Companies that teach money management skills advise waiting twenty-four hours before making large purchases. A set savings plan and budget will help to make these decisions easy. Patience and moderation is the key.