By: Gynn Flores
Making sound financial decisions can be learned. Although some are born to have good business sense, there still no guarantee to financial success thus paving the way for services like credit counseling or business consultancy. Some people spend a lifetime trying to make it but others are blessed to hit the right note at once to succeed early in life. Here are guidelines that you can follow in making sound financial decisions:
- Identify your goal. Study and understand every opportunity thoroughly if it matches your objective. Do not make decisions on impulse.
- Identify the risks involved. Do some researches and talk to financial consultants. Weigh your options thoroughly with regards to the risk factors involved and the length of the return of investment period. Make a go for it if the risks are calculated and you have the means to cover for the duration.
- Personalize your approach and do not depend on other people to decide for you. After studying the pros and cons of the matter, decide for yourself. Listen to advices but never let anyone intimidate you with the decision you want to make. Bear in mind that losses will not be suffered by the person giving you the advice but by you only.
- Conduct a background check. Know the people involved and determine if they could be trusted with your investment. Trace the track record of the company and the people behind it. Their business must not only be registered with the proper government agencies concerned but also endorsed by prominent institutions or financial figures.
- Put your best foot forward when getting into something and be hands-on with the business all throughout the operation. If you can’t hire someone better than you are. Just see to it that your inputs are heard and considered with regards to safeguarding your investment.
- Do not be easily impressed on figures used in presentations. Those are all probabilities and might be overstated as compared to the actual revenues you can make. On the first sign of incidents leading to failures, be there to troubleshoot and do not wait for things to get worse before acting on them.
It takes a lot of maturity and experience to be able to make sound financial decisions. You will acquire this over years of taking care of your own finances. It can be on a trial and error basis which is quite risky but making a plan and sticking to it can save expensive mistakes. There are really no guarantees when it comes to making these important decisions but you can always protect your resources by minimizing the risks.
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By: Gemma Lagasca
Financial guidance for parents to their kids is an effective tool to guide kids to follow the right road in terms of financial issues. Many children were not being aware and taught of the important role of money in the family. It’s a bit alarming and frustrating to deal with children who have the mentality of getting fast cash from parents without exerting efforts. According to CNN Money 101, keeping the kids aware on money will lead them to be responsible and independent with a prosperous future.
- Explain the value of money to the kids. Most young kids are amazed when they see mom and dad getting money from the ATM—it seems that it’s exciting to go there and get instant cash. If they don’t understand where that money came from, they will believe that anyone can have money instantly. The kids will easily ask you to buy all the things they wanted.
- Begin teaching the kids how money works at home as young as they are. A 4 year old child can clearly understand when you explain to them about money. They should learn that mom and dad are working to have money to buy foods, for school fees, clothing and other stuff. Once they realize how money works for the family, they will show an intuitive conservatism that will lead them to be wise in spending money as they grow. A child without proper guidance and knowledge in handling money will grow an impulsive spender—and that begins when they’re on teenage stage.
- Pay them for their allowances. Before you allow them to handle money, assign them to do a simple task at home. That way, they will learn that they need to work first before they can gain a penny. However, once you gave them an allowance it doesn’t mean that they will spend it at once in buying candies or toys. Teach them to save something from it before they begin spending it. For kids’ ages 7-10 years old, you can already entrust them their daily allowance to buy their own snacks or lunch in school.
- Piggy bank technique. It is one way of tea
ching them how to save and invest as young as they are. Every amount that they receive from you should set aside a certain amount in their piggy bank. Explain to them that long-term saving will build a bigger and better amount for bigger projects. By doing this constantly, when the child reaches 10 he will be more amenable in banking.
- For older kids like in high school or college, they should be entrusted with higher responsibility but with proper guidance. Teach them how to use credit cards or checks properly. By doing this, they can live independently by being responsible for their finances. Allow them to commit error. Let them fix their bounced checks or declining credit card balance for them to learn and live only within their limits.
If they want to work for part-time job to earn, let them be. It’s fulfilling to gain fast cash when talents are used to earn them.
Image Source: Tommielle