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8:08 pm - Sunday September 21, 2014

What is Financial Management?

| Management | Rating: 4.5
by Numan

This may seem like a silly question to some people, but to most of us it’s a very good one.  For me, I learn everyday about how I can improve my financial situation.

So… “What does it REALLY Mean to Manage your Finances?”

  • The First step is leaning what Compound Interest is or Time Value of Money.  Basically, Time Value of Money is the fact that a dollar is worth more today vs. tomorrow because we can earn interest on that dollar today.
  • Next, is knowing the importance of creating a budget.  A budget helps with knowing how much to spend AND how much to save each month.
  • Speaking of savings, retirement is a big part of your financial life.  Basically, the earlier you can start saving the more money you will have when you decide to retire.
  • Understanding credit is very important.  The credit card companies will help you understand but keep in mind most of them are in the business of making money at YOUR EXPENSE.
  • Lastly, learning some basics in investing is always a good idea.  Whether you have goals of investing in the stock market or would like to set up a retirement account, knowing where your money is very important.

The great thing about finance is the cost of educating yourself is WAY LESS EXPENSIVE vs. the cost of being ignorant.

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