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4 Things You Need to Know About Money

Written By John Richards on Monday, August 13, 2012 | 10:33 PM

 
Women are often heavily involved in their family finances - or entirely in control of them. This may be out of necessity, or merely due to preference. Regardless, there are many facets to finances that are commonly overlooked - and such mistakes can put a damper on both your finances and personal relationships. Here are four things to be aware of.


 


4 Things You Need to Know About Money

1. Discussing Finances With Your Partner Is a Must
Money is a sensitive subject, especially if you and your partner have different values or carry significant debt. Regardless of your personal situation, it's vital to openly discuss the subject. If your partner resists, insist in a polite and respectful manner. Having this discussion will allow you to put together a joint plan to get out of debt and save for the future - and it significantly reduces your chance of fights about money, or worse - a breakup or divorce.

2. Credit Cards Are Evil When Misused
If you currently carry any credit card balances, create and stick to a strategy to pay them off. Clipping coupons to save on groceries is a great way to easily save loads of money each month, and downgrading services, such as your cell phone, TV, or Internet, is another way to generate savings to apply to your debts. As you create your strategy, realize that these sacrifices are only temporary. You only need to cut back until your last balance is paid off. From there, commit to never carrying a balance again.

3. Saving for the Future Is Important
More than one-third of all Americans have nothing saved for retirement, and over half have less than $25,000. While these statistics are scary, what's worse is that many Americans say they prefer to spend now and worry about the future later. However, the futures of both Medicare and Social Security are uncertain, and the cost of living will undoubtedly increase by the time you retire. How will you pay for basic needs if you don't start saving for retirement now?

4. You Must Distinguish Between Wants and Needs
A need is something you must have in order to survive - this includes housing costs, transportation, food, water, and basic clothing. Almost everything else is a want. How you decide to draw the line is up to you, but categorizing purchases as "wants" or "needs" before you make them will help you avoid unnecessary spending.

Final Thoughts
If you have debt to pay down or want to save more money, the only way you can succeed is by reducing your expenses or increasing your income. Consider†selling your unneeded items online, having a garage sale, or donating clothes and furniture for a tax deduction. Whatever you decide to do, first have a discussion with your partner and see how it fits into your larger financial picture. And if you aren't already, implement a budget to better control your expenditures.

What are some other things women need to know about money? Share your thoughts in the comments.

By David Bakke, contributor for Money Crashers Personal Finance, an online resource for helping people save money today and build wealth for the future.


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