Money Management

Written by Jessica Duquette
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When trying to decide the best way to manage your money, there are some basic factors to keep in mind. Your age, current financial status and goals are three of the most important items that should factor into your decision. Your money management tactics should reflect the answers to these simple questions.

Age

If you’re young and single, you have more freedom to invest your money. Additionally your age and marital status allow you to either be risky in your investments, or select more stable, risk free options. Stocks are a risky investment but can also offer a huge return whereas bonds offer a guaranteed return over a certain period of time.

Financial Status

If you’re well established, you can afford more risky money management options. Stocks tend to be more of a gamble up front with the possibility of a large payout at the end. If you have enough cash on hand to gamble on stocks, this may be the best option for you. On the contrary, if your savings account is scarce, the amount of money you can invest diminishes, thereby eliminating the possibility of a large return on investment. You need to spend money to make money, so the more you can invest the better chance you have of finding yourself on the golf course by age fifty.

Goals

Everyone has different goals. While ultimately we all want to get rich quick, your initial and long term goals will factor into your money management. If you’re striving towards financial freedom, you may only have short term goals, (i.e. eliminate your debt and start with a clean slate.) If you’re planning for more long term goals such as retirement or leaving assets to your family, you may want to consider bonds which guarantee a complete return in addition to accrued interest.


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