Helping your career & work life work better for you!
One of the best examples I know to help explain the “value of money today” concept comes from the cartoon Popeye. As his pal Wimpy tells him (and us) quite often: “I’d gladly pay you Tuesday for a hamburger today.”
So Wimpy gets his burger today, but you have to wait until Tuesday to get paid back your money, the price of the burger. In the meantime, the cost to you is the interest lost from the opportunity to invest that same $20.
So what exactly is credit? Credit lets us make a promise to pay in the future for something we really want, but can’t quite afford to pay for now. It’s a gateway from wanting to actually having. But how do you make credit work for you without it taking control of your life?
Without a doubt, credit plays a major role in our lives. It helps us pay for school and buy that first car — maybe even that first job interview suit. Your credit history (including any liens or bankruptcies) can even affect getting hired. But, for most of us, it also makes it possible to have a house of our own one day.
So now we turn to the lender, whose main job (in addition to making money on the loans they make) is to decide if you are “credit worthy.” Someone they can trust with the obligation to pay them back. And your job is to actually pay them back … with interest. And on time.
But before you even get to asking for a loan, you need to manage your credit in a way that doesn’t leave you drowning in debt. Or hounded by folks trying to get money you can’t pay. Not only so you can be credit worthy when needed, but so you aren’t at the same time drowning in stress. And hounded by scary calls from debt collectors.
I call this page Credit 101 because the more you understand how credit works — and how you can make it work for you — the healthier you and your personal financial picture can be. And I use the word “healthier” on purpose, since the stress money (or lack of it) might lead to can also be a huge health factor.
Like it or not, lenders decide to loan you money based on their evaluation of how well you manage your money. [Read more…]
Do you ever wonder what an MBA knows that you don’t know? Is it really all that helpful to your career? Well, I believe that knowledge truly is power — even more so in job potential. Especially knowledge of basic finance concepts. So with that idea in mind, I put together a basic financial literacy guide to help you strengthen your business savvy. I also threw in a few economic concepts for some extra MBA flavor.
Although it took me two years to get my MBA, most likely you don’t need all that. In fact, I haven’t used a lot of what I learned. But there are some basic finance concepts that absolutely can help. I want you to never again feel that others can take advantage of you for what you DON’T know. And you may even surprise a few people with what you do know!
If you’re thinking about loaning money to a work friend (or anyone), there are some important things to consider. The most obvious thing, of course, is what happens if they don’t pay you back. And how do you preserve the relationship if that actually happens.
But there are other sticky issues that may get attached to the deal. Issues a contract can help. What if they don’t make payments on time. Or start to miss a few. And what if you realize the two of you have a different picture of what’s expected? If your loan is to a coworker this can really sour your workday!
A cash flow spreadsheet helps you track and analyze the amount of real money coming in and going out. Things like your salary or savings account interest are examples of money coming in. Your expenses (whether one at a time or regularly scheduled) are money going out. It’s also a useful career skill!
Why should we even care about creating a spreadsheet to track every single dollar? Isn’t cash flow analysis something only a boring accountant would want to do? Probably yes about the “want” part. But it will help give you a full picture of your finances. So I’m hoping I can get you to want to do it too.
Budget plan spreadsheet. The words alone have such an awful sound. Boring! And then you think what those words might mean for your life — like setting up “limits” to your spending? Ugh!! Nothing there to get excited about either. In fact, “budget plan” sounds like a real nuisance.
But what if I tell you those “limits” can eventually help buy you freedom? And the ability to buy things you really want down the road. Or help you retire one day without relying on cat food lunches. Or simply help make it possible for you to be able to sleep late without credit vampires waking you up. (Plus knowing budgets can help you advance your career!)
I’m guessing you already have some idea of why you might want to create a budget plan for yourself. Maybe you don’t have any savings. Or maybe you see everyone else around you with a lot more savings. And you want to do that for yourself.
Perhaps you’re dreaming of a house some day and want to be able to truly afford it. And you don’t want to be swamped by debt while trying to live the good life. Or maybe you simply worry that you’re spending is out of control. And you can’t imagine what being in control again might even look like.
So a budget — our new best friend — might be exactly what’s needed. First, it helps you get a handle on what you’re really doing with your money over time. But also the things you learn can help you develop new habits that become second nature to you.
Have you ever thought about money as a friend? I just read a wonderful article by Dorlee Michaeli that talks about the power your “money story” can have over your entire life. Including your career. So much of what’s going on with you now financially may be about things learned ages ago. Things you digested and now accept as fact can affect whether you can be “friends with money.”
Our feelings about money and the relationship we have with it goes deep. It extends way beyond just wishing for things like a new house or that car you always wanted. Money matters can be a major stressor in our lives. Especially true when worrying about not having enough. And when making job choices it can actually point you in the wrong direction!