The Main Causes Of Frustration And Arguments In Relationships
Personal finance management is a topic with many different ideas of how it should be complete. There are a many of similarities which finance “gurus” tend to stick to, but there are also certain topics which contradict each other. So who is right, and what is the truth you should follow?
The Basics Level
The basics of managing money are all similar. They are all going to likely start with an evaluation of your financial condition. Analyzing how much money you are bringing in through income every month compared to how much you are spending is the biggest piece of money management. For those of you in business or even if you learned it in school it is as simple as this equation (revenue – expenses = profits). Your income will serve as the revenue and your expenses are your bills. The profits you would receive are the excess funds at the end of the month. Ideally, you want to increase your profits as much as possible because this will allow you to have more freedom for other things. This explanation is about as “vanilla” as you can get in describing how the flow of money works within a business or with personal finances. Aside from this, differences of opinion begin to happen when dealing with the smaller parts of finances.
The Moderate Level
When you begin breaking apart the inner workings of a budget, you begin to see how the different variables tend to cause personal opinions. For example, if we take a look at a car loan versus lease, there will be contenders for each side. I personally would advise sticking with cash to buy a car, and only use a loan for a small amount as a TOOL to get the best deal on a purchase (I’ll explain in another post next week). Some would say do not use a loan AT ALL due to the inherent result of an added debt to your finances. There are even those out there who would suggest using leases to meet a sense of higher luxury than others. Essentially you would lease a new car every 2-3 years for a low monthly cost to always have the newest version of a vehicle. This is similar to how phone companies offer customers the ability to get a new phone every year to keep up with the newest models. This is just one example of how different opinions can be when it comes to financial decisions in life and how to manage them.
The Advanced Level
Once you reach the advanced level, you should be more than comfortable with the first two. This third level resides in the bigger investment decisions. I am not referring to retirement (which can be probably be found at the moderate level). Advanced decisions are going to involve investment decisions which can have big impacts on your finances. An example of this would be getting involved in the stock markets. You would likely work with a broker to set up an investment portfolio as a means to bring in additional income. Each broker or advisor will likely give you an idea of what they can do for you without any guarantee of how it will perform. Other people may choose to tackle the markets or some other investment opportunity on their own. There is inherent risk in doing this, but can be quite profitable if it works. In any situation, this advanced level has much more risk involved than you will likely see in the basic and moderate combined.
The Finance Free Life Bridge
Yes, there is a place for Finance Free Life in this mix. We have never claimed to know everything, nor do we ever plan to. What we will continue to do is offer an abridged version of all the levels (to the best of our abilities). With all of the excess noise of others telling you to want to do or not to do with your finances, we want to act as a sense of reason and logic. We have been doing this for a long time, and have gotten quite good at it. Although there are many stances we take on topics, we are not going to coach you in one manner without giving you the logic and understanding of where we are coming from. If you choose to agree with us and take action, we hope it will be beneficial to you. If you disagree, it’s okay if YOU ARE WRONG and we will still post great content for you! That last comment was obviously in jest, and we greatly appreciate and are open to feedback and other opinions. There is a need in society to have places to go such as this to see topics of how to manage money broken down.